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Rupee Hits Record Low Amid US Trade Deal Fears
1 Dec
Summary
- The rupee closed at a historic low of 89.5475 against the US dollar.
- Uncertainty in US trade deal discussions weakened currency sentiment.
- Rising gold and silver prices increased India's import costs.
The Indian rupee experienced significant weakness, culminating in a record closing low of 89.5475 against the US dollar on Monday. Intra-day trading saw the currency reach an all-time low of 89.7575 before a slight recovery. Analysts attribute this depreciation primarily to ongoing uncertainty surrounding trade deal discussions with the United States, creating fragile market sentiment that requires a concrete agreement for meaningful support.
Further exacerbating the situation, the rupee also touched a record low of 12.69 against the offshore Chinese yuan. The Reserve Bank of India is reported to have intervened in the market, selling dollars to curb further depreciation and prevent the rupee from breaching the significant 90 per dollar threshold. This intervention signals a proactive stance by the central bank to manage currency volatility.
The currency's decline has also been impacted by escalating commodity prices. Historic highs in gold and silver have substantially increased India's import expenditures, placing additional downward pressure on the rupee. This confluence of factors, including trade uncertainties and rising import costs, has led to the rupee's current record-low status.
