Rupee Hits Record Low Amid Bond Yield Surge and Investor Outflow

The Indian rupee experienced its steepest single-day fall in six months, dropping 53 paise to a record low against the US dollar. This decline was driven by rising American bond yields, increased crude oil prices, and foreign investor outflows as equities in other Asian markets appeared more attractive.

The rupee witnessed its steepest single-day decline in six months, plunging 53 paise to a new all-time low of 85.80 against the US dollar during mid-session on Friday. The declining trend was attributed to the relentless surge in American bond yields, enhancing the dollar's appeal.

Despite positive movements in domestic equity markets, foreign investors retracted their investments in Indian equities. Analysts noted this trend was driven by more attractive valuations in other Asian markets, exacerbating the rupee's downward trajectory.

Contributing to the rupee's decline were rising crude oil prices. Meanwhile, speculation surrounds the Reserve Bank's handling of maturing forward contracts, as the market faces dollar scarcity and low liquidity.

(With inputs from agencies.)