Rupee hits all-time low of 84.50 against the US dollar amid market volatility

The rupee fell to a grounds low, closing 8 paise down astatine 84.50 per dollar connected Thursday. The depreciation was attributed to a operation of home and planetary factors, including a monolithic sell-off successful Indian equity markets and a surge successful crude lipid prices. Escalating geopolitical tensions, particularly the Russia-Ukraine conflict, and continuous overseas money outflows further pressured the currency.

At the interbank forex market, the rupee opened astatine 84.41 and slipped to an intra-day debased of 84.51 earlier settling astatine 84.50. This marked a caller nadir, surpassing its erstwhile debased of 84.46 connected November 14. On Tuesday, the rupee had closed level astatine 84.42, with markets remaining unopen connected Wednesday owed to assembly elections successful Maharashtra.

Key contributors to rupee’s decline

1. Strengthening US dollar:
   The dollar index, which measures the greenback against six large currencies, climbed to 106.66, reflecting heightened safe-haven request amidst geopolitical tensions.

2. Crude lipid prices:
   Brent crude roseate 1.35 per cent to USD 73.93 per barrel, adding unit connected India’s import measure and contributing to the rupee's weakness.

3. Equity marketplace rout:
   Domestic equities saw important losses, with the Sensex dropping 422.59 points to 77,155.79 and the Nifty down 168.60 points to 23,349.90.

4. Foreign money outflows:
   FIIs sold shares worthy Rs 3,411.73 crore connected Tuesday, arsenic per speech data, further denting marketplace sentiment.

Market outlook

The rupee is expected to commercialized betwixt 84.35 and 84.65 successful the adjacent term. With ongoing geopolitical uncertainties, including the Adani Group’s ineligible challenges successful the US, analysts expect continued volatility. Investors are advised to stay cautious arsenic the currency faces sustained downward pressure.