Rupee Hits All-Time Low of ₹90.25 as Foreign Investors Pull Out Funds
The Indian currency weakened sharply on December 3 due to heavy foreign outflows and strong dollar demand from importers.
New Delhi, December 4: The Indian rupee touched a historic low of ₹90.25 against the US dollar on Tuesday, December 3, marking a sharp decline of 29 paise during the trading session. The fall came as foreign investors continued pulling money out of Indian markets while banks purchased large amounts of dollars.
The rupee started trading at ₹89.96 but weakened throughout the day to hit the record low of ₹90.25. Just a day earlier, on December 2, it had closed at ₹89.96 after falling 43 paise due to speculative trading activity and increased demand for dollars from Indian importers.
Market experts point to several reasons behind the currency’s weakness. Indian stock markets have been performing poorly, and there is no clear progress on a potential trade agreement between India and the United States. Additionally, businesses need more dollars for imports, which is putting pressure on the rupee.
The Reserve Bank of India (RBI) is currently holding its monetary policy meeting, with the interest rate decision scheduled for December 5. Many analysts believe that if the RBI decides to cut interest rates, it could push the rupee down even further. The US Federal Reserve will also announce its rate decision on December 10, which traders are watching closely.
International market conditions are not helping either. The US dollar remains strong globally, and Brent crude oil which India imports in large quantities is trading around $62.43 per barrel. Higher oil prices mean India needs more dollars to pay for its energy needs.
The weakness in the rupee was reflected in India’s stock markets. The Sensex fell 165.35 points to close at 84,972.92 in early trading, while the Nifty 50 dropped 77.85 points to 25,954.35.
According to stock exchange data, foreign institutional investors (FIIs) sold Indian equities worth ₹3,642.30 crore on Tuesday alone. This massive selling spree has created negative sentiment in both the currency and stock markets.
Analysts warn that the rupee may remain under pressure in the coming days unless foreign investment flows improve or the RBI takes strong measures to support the currency.
