The Indian rupee has recently reached its lowest-ever level against the US dollar, setting a new record. This decline can be attributed to several factors, including the recent surge in global crude oil prices and significant sell-offs by foreign investors in India's stock markets. According to a report from Reuters, on Friday, the rupee weakened further, touching a low of 83.9900 against the US dollar, surpassing its previous record low of 83.9850, which was last observed on September 12.
Although the rupee initially showed a slight improvement in early trading, gaining two paise and briefly strengthening to 83.96 against the dollar, this upward momentum did not last. As the day progressed, mounting pressures from various economic factors caused the rupee to slip once again. Early trade on Friday saw the rupee rise slightly to 83.96 amid global market trends that indicated a weaker US dollar. However, gains for the Indian currency were short-lived as foreign exchange traders pointed out that increasing crude oil prices and continuous outflows of foreign capital into international markets dampened the rupee's performance. Moreover, the sluggish start of India's domestic stock markets on the same day added to the strain on the local currency.
In the interbank foreign exchange market, the rupee started the day at 83.97 per dollar but quickly moved to 83.96, reflecting a minor increase of two paise compared to the previous day's close. On Thursday, the rupee had ended the day at 83.98 against the US dollar.
At the same time, the dollar index, which tracks the performance of the US dollar against six major global currencies, was down by 0.11%, standing at 102.87. Meanwhile, Brent crude, the international benchmark for oil prices, showed an increase of 1.48%, trading at $77.71 per barrel. Adding to the pressures, stock market data revealed that foreign institutional investors (FIIs) were net sellers on Thursday, offloading shares worth a significant Rs 4,926.61 crore.
This convergence of rising oil prices, stock market volatility, and persistent foreign capital outflows has contributed to the rupee's continued depreciation, pushing it to record lows against the US dollar. Currently, The Kuwaiti dinar is the strongest currency in the world, with 1 Kuwaiti dinar buying 274.40 Indian rupees.
