Home / Business and Economy / Rupee Hits Record Low Amid Trade Stalemate
Rupee Hits Record Low Amid Trade Stalemate
15 Dec
Summary
- The rupee fell to a record low of 90.7850 per dollar.
- Concerns over U.S.-India trade talks and outflows drove the decline.
- Foreign investors have sold over $18 billion in local stocks this year.
The Indian rupee experienced a significant decline, surpassing the 90-per-dollar mark for the third consecutive session and reaching a new record low. This downward trend was primarily fueled by apprehension over the protracted U.S.-India trade negotiations and ongoing portfolio outflows from the country.
Traders reported that the Reserve Bank of India likely intervened to curb the rupee's sharp fall. However, analysts suggest that a gradual depreciation is probable unless a trade agreement is reached with the United States. Despite a recent narrowing of India's merchandise trade deficit, concerns over corporate hedging demand and persistent foreign investor outflows continue to weigh on the currency.
Foreign investors have offloaded net positions exceeding $18 billion in Indian equities this year, marking the worst yearly outflow on record. This negative flow, combined with the trade stalemate, has prevented the rupee from benefiting from a generally weaker global dollar. Attention now shifts to the Reserve Bank of India's upcoming dollar-rupee buy/sell swap auction.
