Rupee Hits Record Low Amid Market Turmoil and Rising Oil Prices

Rupee Declines to New Low

Mumbai: In early trading on Friday, the Indian rupee fell by 33 paise, reaching a historic low of 94.24 against the US dollar. This decline is attributed to high oil prices and a strengthening dollar, compounded by ongoing tensions in the West Asia region. Forex traders noted that heavy selling in domestic equity markets and continued outflows from foreign institutional investors (FIIs) further pressured the rupee.

At the interbank foreign exchange market, the rupee started at 94.18 but quickly dropped to 94.29, marking a 33 paise decrease from the previous close. The rupee had already closed at a record low of 93.96 against the dollar on Wednesday. Trading in stock, forex, commodity, and bullion markets was halted on Thursday due to the Ram Navami holiday.

According to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, "With Brent crude prices exceeding USD 105.75 per barrel and the dollar index approaching 100, the rupee opened weak." The dollar index, which measures the dollar's strength against a basket of six currencies, was up by 0.08 percent at 99.67. Brent crude, the global oil benchmark, initially rose before settling down 0.78 percent at USD 107.1 per barrel in futures trading.

On the domestic equity front, the Sensex plummeted by 926.92 points to 74,346.53 in morning trading, while the Nifty index fell by 280.95 points to 23,025.50. Data from exchanges indicated that foreign institutional investors sold equities worth Rs 1,805.37 crore on a net basis on Wednesday.