The Indian rupee slipped to a fresh record low on Monday, touching ₹96.25 against the US dollar in early trade, extending its recent weakening trend. The fall comes amid rising global uncertainty, higher crude oil prices and sustained pressure from foreign fund outflows.
Market experts said a combination of domestic and international factors contributed to the decline. One of the major reasons was the rise in crude oil prices following geopolitical tensions in West Asia. India imports nearly 85% of its crude oil requirement, making the country vulnerable to sudden increases in global energy prices. Higher oil prices increase the demand for dollars to pay for imports, which often weakens the rupee.
The strengthening of the US dollar against major global currencies also added pressure on the Indian currency. Investors globally have shifted toward safer assets amid uncertainty, increasing demand for the dollar. Foreign institutional investors have also remained cautious, with continued outflows affecting market sentiment.
The weakening rupee can have a direct impact on consumers and businesses. Imported products such as fuel, electronic goods, machinery and industrial raw materials may become costlier. Higher import costs can eventually lead to increased prices for several goods and services, adding to inflation concerns.
The fall in the rupee also affected domestic markets, with Indian equity benchmarks witnessing weakness during the trading session. Sectors heavily dependent on imported inputs, including aviation and manufacturing, may face pressure if the trend continues.
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