Indian Rupee Plunges to Record Low as Dollar Flexes Muscles
The Indian rupee tumbled to a record low near 92 against the US dollar on Thursday, leaving investors wincing as the greenback flexed its global dominance. The rupee opened at 91.99 today after closing at 91.78 yesterday, which showed that Asian currencies were facing difficulties.
Experts identified continuous foreign capital outflows, together with urgent hedging activities, as the main reasons that prevented any positive reactions to India’s strong economic performance. The rupee showed traders its capacity to transform domestic positive feelings into negative emotions, because every downward movement made them aware of worldwide economic challenges and the rising power of the dollar. The currency market showed through its morning trading activities that the rupee currently faces intense market challenges.
Factors Affecting The Indian Rupee
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Global Dollar Strength: The US dollar recovered slightly after the Federal Reserve’s latest policy decision, adding pressure on the rupee.
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US Fed Policy & Treasury Yields: Rising US Treasury yields, alongside Fed signals of persistent inflation and a stabilizing labor market, strengthened the dollar globally.
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Currency Hedging & Risk Aversion: Investors across Asia engaged in hedging and cautious trading due to concerns over the dollar’s recovery.
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Domestic Policy Watch: Markets are closely observing the Economic Survey 2025–26, presented by Finance Minister Nirmala Sitharaman, ahead of the Union Budget on February 1.
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Impact of Fiscal Measures: Expectations around government spending, taxation, or reforms could influence investor sentiment and the rupee’s movement.
Oil Prices Add Pressure on the Rupee:
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Brent Crude Gains: Brent crude rose 1.32% to $69.30 per barrel.
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WTI Crude Rises: US West Texas Intermediate (WTI) futures increased 1.38% to $64.08 per barrel.
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Impact on Import Bill: Higher oil prices raise India’s import costs, adding strain to the current account.
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Pressure on Rupee: The increased import burden contributes to the rupee’s downward movement.
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Analyst View: Unless global dollar strength eases and crude prices stabilize, the rupee is likely to remain under pressure in the near term.
Indian Stocks Feel The Heat As Rupee Hits Record Low
The Indian stock market followed the unpredictable movements of the rupee, which led to the Sensex losing 413 points to reach 81,931 and the Nifty 50 dropping 122 points to reach 25,220. Investors experienced financial losses because weak global market signals combined with constant selling activity from foreign institutional investors (FII). The market unrest affected midcap and smallcap stocks because traders needed to protect their investments during currency fluctuations and increasing crude oil prices.
The situation presents a perfect example of worldwide events connecting with regional circumstances because the US dollar strength, rising oil prices, capital movement, and upcoming Economic Survey and Union Budget create ongoing market anxiety. The current market situation requires traders to prepare themselves for a challenging environment that demands mental strength. The market response to the rupee movement needs to be monitored because these two elements will create market fluctuations throughout the upcoming period.
(With Inputs From Reuters)
Aishwarya is a journalism graduate with over three years of experience thriving in the buzzing corporate media world. She’s got a knack for decoding business news, tracking the twists and turns of the stock market, covering the masala of the entertainment world, and sometimes her stories come with just the right sprinkle of political commentary. She has worked with several organizations, interned at ZEE and gained professional skills at TV9 and News24, And now is learning and writing at NewsX, she’s no stranger to the newsroom hustle. Her storytelling style is fast-paced, creative, and perfectly tailored to connect with both the platform and its audience. Moto: Approaching every story from the reader’s point of view, backing up her insights with solid facts.
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