The Rupee has just hit a serious milestone—and not a good one. And then it plunged past the 91-mark against the US Dollar for the first time ever in intra-day trade.
The local unit was trading at 91.14 against the US dollar at 11:45 am on Tuesday, down a sharp 36 paise from its previous close. This is a rapid depreciation: the Rupee slid from 90 to 91 in just the last 10 trading sessions. It’s lost 1\% in the past five sessions alone, or nothing.
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The Pressure Points: Why the Rupee Is Tanking
This latest slump is being driven by the same lingering issues, which is the most frustrating part.
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FII Outflows (The Big Seller): Foreign Institutional Investors are relentless. They sold equities worth ₹1,468.32 crore on Monday. This capital flight puts direct, continuous downward pressure on the Rupee.
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Trade Deal Fog: Here’s the kicker: the uncertainty over the India-US trade deal continues to cloud any potential recovery. Finrex Treasury Advisors’ Anil Kumar Bhansali noted that even though the Commerce Secretary says they are “closest to the deal,” the lack of a signed agreement is fueling persistent dollar buying.
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No Relief from Deficit: Even a recent reduction in the trade deficit couldn’t save the Rupee, which is a key economic indicator. The FII outflows are simply overpowering any positive domestic data.
The thing is, the Rupee closed at a new all-time low of 90.78 on Monday, which was already bad. Now it’s breached 91.
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Market Snapshot
The pressure on the currency is coinciding with broader domestic market weakness.
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Equities: The 30-share benchmark Sensex declined 363.92 points in early trade, while the Nifty was down 106.65 points.
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Oil: Brent crude, the global oil benchmark, was trading lower at 60.19 per barrel, which is the one small positive for India’s import bill, let’s be real.
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Inflation: Meanwhile, wholesale price inflation stayed in the negative for the second consecutive month in November at (-) 0.32 per cent. This is good for inflation but isn’t enough to boost the Rupee amid the capital flight.
The market consensus is clear: until the US-India trade deal provides clarity or the FII selling stops, the Rupee faces strong headwinds and further pressure against the greenback.
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