The Indian Rupee hit a fresh low on Thursday, pressured by the US’s heavy dollar demand, which reflects mounting import concerns over the negative impact of US tariffs on India’s domestic growth.
The rupee fell to a record low of 88.4425 per dollar last Friday, down from 88.10 in the previous session, breaching its previous all-time low of 88.36.
US tariffs on Indian goods, imposed last month, are eroding investor confidence, contributing to the Indian rupee’s status as one of the weakest currencies. Meanwhile, foreign investors have shrunk their net dollar holdings by $11.7 billion from India’s debt and equity markets so far this year.
RBI has become the saviour of India, trying to balance the pace of the rupee’s decline. Marketers said that the Central Bank has been trading dollars to discourage large swings.
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Weakness in the rupee is likely to persist in the near term, considering the impact of the US tariffs on labour-intensive sectors, Abhishek Goenka, founder & CEO of IFA Global, said.
