Hyderabad: The Indian rupee fell to a record low of 88.29 against the US dollar on Friday. The decline was driven by global market volatility, persistent foreign outflows, and rising demand for the American currency.
Currency dealers said the rupee opened weak and kept slipping through the day. Investors moved to safe-haven assets amid global uncertainty. The fall also reflected concerns over India’s widening trade deficit and heavy selling by foreign institutional investors.
RBI monitoring exchange rate movement
The Reserve Bank of India (RBI) monitored the sharp fall and intervened in the forex market to check volatility. Traders said the central bank sold dollars through state-run banks to ease pressure, but the rupee still closed at its lowest level.
Market analysts pointed out that a stronger US dollar index and firm bond yields in the United States hit emerging market currencies. Rising crude oil prices and high import bills also weighed on the rupee. Foreign capital outflows added further pressure.
Experts warned that continued depreciation could worsen inflation by making imports costlier. They said businesses dependent on imported raw materials would be the first to feel the impact if the weakness continues.
Despite the decline, officials stressed that India’s foreign exchange reserves remain strong. They believe the reserves are sufficient to handle volatility in the near term.
