Rupee vs. Dollar: Indian Rupee Falls to Historic Low
The Indian rupee fell to a historic low against the US dollar on Friday, continuing its decline for the third consecutive day this week. It closed at 85.9650 against the US dollar, marking a 0.2% decline for the week. This also represents the rupee’s tenth consecutive weekly decline, surpassing its previous record low of 85.9325, reached on Thursday.
The currency has been under pressure due to a strengthening dollar and weak capital flows. The dollar index has remained above 109, as markets anticipate the release of US non-farm payroll data, which could influence expectations of a Federal Reserve rate cut. According to three traders cited in a Reuters report, state-owned banks, acting on behalf of the Reserve Bank of India (RBI), intervened on Friday to sell dollars, helping to limit the rupee’s losses. This was also reported by The Financial Express.
Anuj Chaudhary, a research analyst at Mirae Asset Sharekhan, expects the rupee to remain under pressure in the near term. He stated, “Weak domestic market sentiment, a strong greenback, and continued FII outflows will continue to exert downward pressure on the rupee. Additionally, rising crude oil prices and increasing US Treasury yields could further weigh on the currency. However, RBI intervention may provide some support.”
Currently, traders expect the rupee to trade within the 85.80–86.15/$ range, depending on the non-farm payrolls report and US consumer data. Persistent headwinds, including a rising dollar and global economic uncertainty, have heavily impacted the rupee. However, regular interventions by the RBI have helped stabilize the situation, mitigating further declines.
