Indian Rupee Falls to 86.00 Against Dollar, Reaching a Historic Low

Mumbai(The Uttam Hindu): The Indian rupee dropped by 14 paise, hitting a historic low of 86.00 against the U.S. dollar on Friday, facing pressure from a stronger dollar, rising crude oil prices, and continuous foreign fund outflows. The rupee opened at 85.88, briefly touched a peak of 85.85, and ended the day at 86.00, marking a 14-paise decline from its previous closing. On Thursday, the rupee had gained 5 paise, closing at 85.86, after a 17-paise drop in the preceding session.

Forex traders attributed the rupee's fall to several factors, including the strengthening of the U.S. dollar, driven by expectations of trade policies under the incoming U.S. administration of President-elect Donald Trump. The surge in crude oil prices and persistent foreign institutional investor (FII) outflows also contributed to the pressure on the Indian currency. Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, explained, “The weak domestic markets, along with a strong U.S. dollar and rising crude oil prices, continue to weigh on the rupee. The increasing U.S. Treasury yields and persistent FII outflows could keep the rupee under pressure in the coming days.”

Meanwhile, crude oil prices surged 1.96% to $78.43 per barrel, further impacting the rupee. The dollar index, which measures the greenback’s strength against a basket of six currencies, rose slightly by 0.01% to 109.01. U.S. 10-year bond yields also climbed to 4.69%. Domestic equity markets also remained in the red, with the BSE Sensex falling 241.30 points to 77,378.91, and the Nifty dropping 95.00 points to 23,431.50. On January 9, 2025, FIIs offloaded ₹7,170.87 crore in Indian equities. Choudhary suggested that the rupee may continue facing downward pressure, though any intervention by the Reserve Bank of India (RBI) could help stabilize it at lower levels. The USD-INR spot price is expected to fluctuate between ₹85.80 and ₹86.15.