The Indian Rupee hit a new all-time low of 87.59 against the US dollar on Thursday, dropping by 16 paise as expectations of a rate cut by the Reserve Bank of India in its upcoming monetary policy meeting weighed on the currency. The depreciation was also attributed to weak domestic markets and demand for dollars from importers.
Furthermore, concerns surrounding the global trade war and uncertainty over US trade tariffs added pressure on the rupee. The currency opened at 87.54 against the dollar and reached an intraday low of 87.60 before closing at 87.59, marking a 16 paise decline from the previous day.
This year, the rupee has depreciated over 2%, making it one of the worst-performing Asian currencies. The currency’s value has fallen by 193 paise since the beginning of the year, with the exchange rate at 85.64 on January 1, 2025.
Forex analysts anticipate a negative bias for the rupee due to weak domestic markets, importer demand for dollars, and global trade tensions. The Monetary Policy Committee’s decision on Friday and US non-farm payrolls data are expected to influence the rupee’s movement.
The dollar index rose by 0.40% to 108.00, while Brent crude oil prices increased to $75.00 per barrel. Additionally, weak PMI data indicated a slowdown in economic activity, with India’s services sector expanding at the slowest pace in over two years.
The RBI’s three-day meeting of the Monetary Policy Committee began on Wednesday, with the policy decisions set to be announced on February 7. In the stock market, the BSE Sensex and Nifty were trading lower, with foreign institutional investors selling equities worth ₹3,549.95 crore on a net basis on Thursday.
