Rupee Hits Record Low Amidst Global Uncertainties

The Indian rupee depreciated, closing at a record low against the US dollar. This trend is influenced by foreign fund outflows and a strong dollar index, exacerbated by domestic economic challenges and geopolitical factors. Moreover, elevated crude oil prices and foreign investments add pressure on the currency.

The Indian rupee reached a new record low against the US dollar, ending this year with a concerning 3 percent loss, fueled by significant foreign fund outflows and a robust dollar in global markets.

According to forex traders, the rupee’s downturn is aggravating due to the Federal Reserve's cautious approach and external factors like significant increases in the dollar index and 10-year US bond yields. In India, slowing domestic growth, a widening trade deficit, and persistent foreign withdrawals further weigh down the currency.

Anuj Choudhary, a research analyst, predicts the rupee will maintain a negative outlook given the high crude oil prices and the overall strength of the dollar. Persistent foreign fund selling also strains the currency, with an outflow of Rs 4,645.22 crore from the capital markets recently.