Indian Rupee Plummets to Record Low Closing at 95.23 Against US Dollar

Rupee Hits All-Time Low Against US Dollar Amid Global Market Volatility

The Indian rupee has fallen to an all-time low of 95.23 against the US dollar on Monday, driven by ongoing Middle East tensions, high oil prices, and concerns over inflation and economic slowdown. The rupee's decline of 39 paise from its previous close marks a significant drop in the currency's value.

The ongoing surge in oil prices, combined with foreign fund outflows, is putting a visible strain on India's trade balance and broader economy. Brent oil, hovering near USD 110 per barrel, is exerting pressure on oil-importing economies like India. The interbank foreign exchange market saw the rupee open at 94.95 against the US dollar, before losing ground and settling at its lowest-ever closing level of 95.23.

Table: Rupee's Performance Over the Past Few Trading Days

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The Indian currency had previously recorded its lowest closing level on April 29. Stock exchanges and currency markets were closed on Friday on account of Maharashtra Day.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 98.26, up 0.11 per cent. Brent crude, the global oil benchmark, was trading higher by 1.37 per cent at USD 109.65 per barrel in futures trade.

Investors' focus was on the counting of votes for the West Bengal state elections, with IFA Global noting that a BJP victory would be positive for domestic assets. However, the impact is likely to be short-lived as global geopolitics will continue to be the driving factor given its direct impact on supply chains and industry. On the domestic equity market front, the Sensex rallied 355.90 points to settle at 77,269.40, while the Nifty climbed 121.75 points to 24,119.30.

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Foreign Institutional Investors purchased equities worth Rs 2,835.62 crore on Monday, according to exchange data. Expenditure Secretary V Vualnam has cautioned that the upcoming few quarters and the coming year may have a "lot of stress points" due to fiscal stress. However, he emphasized that capital expenditure would remain a priority item and is expected to continue at the budgeted level.