Rupee fell to its lowest-ever level against the US dollar, touching 92.35 during recent trading. The decline came as rising crude oil prices, a strong US dollar and foreign investor outflows put pressure on the domestic currency.
In the interbank foreign exchange market, the rupee started the session on a weaker note and continued to lose ground during the day. It eventually touched the record low level of 92.35 against the dollar, reflecting the pressure faced by emerging market currencies amid global uncertainty.
A key reason behind the rupee’s fall is the increase in global crude oil prices. India imports a large part of its oil needs from other countries. When oil prices rise, India has to spend more dollars on imports. This increases demand for the US currency and weakens the rupee.
Another factor affecting the rupee is the strength of the US dollar. The dollar has been gaining against many global currencies as investors move their money into safer assets during uncertain times. This trend has also led to weakness in currencies such as the rupee.
Foreign investors pulling money out of Indian markets have added to the pressure on the currency. When overseas investors sell Indian shares or bonds and take their money out, they convert rupees into dollars. This increases demand for the US currency and pushes the rupee lower.
Geopolitical tensions in West Asia have also contributed to market volatility. These tensions have pushed crude oil prices higher and increased uncertainty in global markets, which indirectly affects the Indian currency.
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