Has the Rupee Plummeted to an All-Time Low Beyond 90 per Dollar?
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Synopsis
The Indian rupee has hit an unprecedented low of 90.13 against the US dollar, raising concerns about inflation and foreign investment. This alarming trend has caused significant fluctuations in the stock market, reflecting investor anxiety. Analysts suggest that the stability of the rupee hinges on forthcoming trade agreements with the US, making this a pivotal moment for the economy.
Key Takeaways
- The Indian rupee fell to a record low of 90.13 against the US dollar.
- Weak trade and uncertainty over the India-US trade deal are driving the decline.
- Investors are concerned about inflation and foreign investment.
- Market analysts are watching for signs of stability.
- Upcoming trade agreements could influence the rupee's future.
New Delhi, Dec 3 (NationPress) The Indian rupee has experienced a dramatic decline on Wednesday, breaching the significant 90-per-dollar threshold for the very first time.
The currency plummeted to an unprecedented low of 90.13 against the US dollar, surpassing its former record low of 89.9475 set just a day prior.
This drop in the rupee is attributed to weak trade and portfolio inflows, alongside escalating uncertainty surrounding the India-US trade agreement.
Such conditions exerted persistent pressure on the currency throughout the trading session.
The steep decline in the rupee also impacted domestic equity markets adversely. The Nifty index fell below the 26,000 mark, indicating a cautious sentiment amongst investors.
The Sensex saw a dip of nearly 200 points during early trading as the weakening currency heightened concerns regarding inflation and foreign investor activity.
Market analysts noted that the overall mood remained tense, with traders keenly observing for any signs of stabilization in the rupee and clearer insights on trade negotiations between India and the United States.
“The depreciation of the rupee is likely to cease and potentially reverse once the India-US trade deal is finalized, which is anticipated this month. Much will depend, however, on the particulars of the tariffs that will be imposed on India as part of the agreement,” analysts commented.
In the meantime, the Indian stock market commenced on a subdued note on Wednesday, with both major indices exhibiting minimal fluctuations during early trading.
The Sensex marginally increased by just 12 points to 85,151, while the Nifty decreased by 18 points to 26,014.
Upon the market's opening, shares of HUL, Titan, Tata Motors PV, NTPC, BEL, Trent, Bajaj Finserv, Kotak Bank, Ultratech Cement, Maruti Suzuki, L&T, Power Grid, and ITC were among the notable losers in the morning session.
“A significant concern currently, which has contributed to the gradual decline in the market, is the ongoing depreciation of the rupee and fears of further declines since the RBI has not intervened to support the rupee,” analysts conveyed.
“This worry is compelling foreign institutional investors (FIIs) to sell, even amid improving fundamentals reflected in rising corporate earnings and a robust rebound in GDP growth,” they added.
Point of View
I emphasize the importance of understanding the broader economic implications of the rupee's decline. While this situation poses challenges, it's crucial to remain informed and engaged with ongoing trade negotiations. Our commitment at NationPress is to provide accurate and timely news, reflecting the interests and concerns of our readers.
NationPress
03/12/2025
Frequently Asked Questions
What factors contributed to the rupee's decline?
The decline is due to weak trade and portfolio flows, as well as uncertainty over the India-US trade deal.
What is the significance of the rupee breaching 90 per dollar?
It's the first time the rupee has fallen below this crucial level, raising concerns over inflation and foreign investment.
How has the stock market reacted to the rupee's decline?
The weakening currency has negatively impacted domestic equity markets, with significant drops in indices like Nifty and Sensex.
Will the rupee stabilize soon?
Analysts predict that stability may return with clarity on the India-US trade negotiations which could happen this month.
What should investors be cautious about now?
Investors should remain vigilant regarding the rupee's fluctuations and its potential impact on inflation and market volatility.
