Rupee Hits Record Low Amid Economic Slowdown

The rupee fell to a historic low of 85.83 against the US dollar due to the strengthening American currency and climbing crude oil prices. Analysts cite weak domestic equity markets and reduced economic growth forecasts as contributing factors, with the GDP growth estimated at 6.4% for 2024-25.

The Indian rupee hit a fresh low of 85.83 against the US dollar on Wednesday, as a strengthening American currency and rising crude oil prices continued to pressure the currency. Despite the government's efforts, the country also faces a downgraded economic growth projection, adding to investor concerns.

Analysts highlight that sluggish domestic equity markets further weakened the rupee. In contrast, better growth prospects in the US bolstered expectations of a delayed interest rate cut by the Federal Reserve, driving US Treasury yields and dollar demand to record levels.

New data published on Tuesday revealed that India's economic growth rate is forecasted to hit a four-year low of 6.4% in 2024-25. This figure, driven by underperformance in the manufacturing and services sectors, marks the lowest growth since the pandemic year of 2020-21 when a negative growth of 5.8% was recorded.

(With inputs from agencies.)