Historic Plunge: Rupee Hits All-Time Low Against Dollar

The Indian rupee suffered a significant fall, declining 55 paise to a historic low of 86.59 against the US dollar. This drop is attributed to the strengthening dollar and rising crude oil prices. Concerns over foreign capital outflow and dwindling forex reserves persist.

The Indian rupee experienced its most significant drop in nearly two years, falling 55 paise to a historic low of 86.59 against the US dollar during Monday's mid-session. This sharp decline is largely attributed to the strengthening of the American currency coupled with a surge in crude oil prices.

At the interbank foreign exchange market, the rupee opened at 86.12, plunging to its lowest ever level of 86.59. Despite some recovery, it remained 46 paise down trading at 86.50 against the dollar. The steep decline is the sharpest since February 2023, when the rupee fell 68 paise in a single session.

Foreign Institutional Investors have played a role in this downturn, offloading equities worth significant amounts, while the Reserve Bank of India may adjust its approach to stabilize the rupee amid decreasing currency reserves. Meanwhile, the dollar remains strong, fueled by positive job growth in the US and recent sanctions on Russia, raising expectations of a slower interest rate cut by the Federal Reserve.

(With inputs from agencies.)