Rupee's Record Low: Impact of RBI's Anticipated Rate Cut

The Indian rupee plummeted to a historic low against the US dollar, impacted by anticipated rate cuts from the Reserve Bank of India and a stronger US currency. The rupee's decline has raised investor concern as foreign banks and oil firms increase dollar purchases amidst global economic uncertainties.

The Indian rupee sank to a record low of 87.58 against the US dollar, triggered by speculation around a potential interest rate cut by the Reserve Bank of India (RBI). The currency's poor performance is further compounded by a strengthened US dollar and ongoing global trade tensions.

This economic downturn marks a 2% depreciation of the rupee this year, positioning it as one of Asia's worst-performing currencies. Forex traders have attributed this decline to robust dollar procurement by foreign institutions and oil companies, accentuated by a slowdown in global economic activities.

The RBI's upcoming policy meeting is being closely watched as it wields significant influence over the currency's trajectory. Investor sentiment remains cautious, with foreign institutional investors having offloaded significant equities and weak PMI data hinting at slower economic growth.

(With inputs from agencies.)