The Indian Rupee just keeps taking hits. That happened. It plummeted another 24 paise in early trade on Friday, hitting a new all-time low of 90.56 against the US dollar. This depreciation follows its previous record close of 90.32/USD on Thursday.
The currency opened at $90.43 against the greenback and then fell further, and here’s the kicker: this continuous slide is denting investor sentiment, or nothing.
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The Downward Pressure: What’s Driving The Slide?
Forex traders are pointing to a mix of domestic and global factors creating this pressure:
Aggressive Dollar Purchases: Importers are making aggressive dollar purchases, particularly due to the surging global prices for precious metals, pushing up demand for the US currency.
Persistent Fund Outflows: Foreign institutional investors (FIIs) are persistently pulling capital out of the Indian market. On Thursday alone, FIIs were net sellers of equities worth ₹2,020.94 crore.
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India-US Trade Uncertainty: Lack of a concrete outcome from the ongoing India-US trade talks is clearly weighing on the market. Today is the final day of talks between the Indian and visiting American delegation, and the expectation is high for a deal announcement. As a Treasury Advisor put it, they are honoring the ₹90 to ₹90.60 range but keeping a close watch on the RBI.
Global Factors: The dollar index is trading slightly higher (0.02% up at 98.37), and Brent crude, the global oil benchmark, is also trading up at USD 61.69 per barrel. These moves just add external stress to the rupee.
Stock Market Counter-Move
Despite the rupee’s troubles, the Indian stock market opened in the green for the second straight session on Friday. Domestic Institutional Investors (DIIs) are stepping in—they were net buyers of equities worth ₹3,796.07 crore on Thursday, largely balancing the FII outflows.
SENSEX: Up 437.32 points (0.52%) to 85,225.45
NIFTY50: Up 129.30 points (0.50%) to 26,027.85
Metal stocks led the rally (Nifty Metal up 1.22%), but the rupee’s weakness did drag down the IT sector (Nifty IT down -0.12%), those too.
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