Rupee Hits Record Low Amid Trade Uncertainty
The Indian rupee slipped to a record low against the US dollar on Monday, pressured by persistent foreign fund outflows and uncertainty surrounding a potential trade agreement between India and the United States. Market participants said global risk aversion and a stronger dollar added to the currency’s weakness.
Traders noted that sustained selling by foreign portfolio investors in Indian equities and bonds has continued to weigh on the rupee. Concerns over the timing and scope of a US–India trade deal have also dampened sentiment, limiting any near-term support for the local currency.
Outflows and Dollar Strength Add Pressure
Analysts said the rupee’s decline reflects broader pressures faced by emerging market currencies as the dollar remains firm on expectations of prolonged higher interest rates in the United States. Persistent capital outflows have reduced dollar inflows, while demand for the greenback from importers has remained strong.
Despite intervention by the Reserve Bank of India to smooth volatility, the rupee has struggled to recover meaningfully. Dealers said the central bank’s actions have helped prevent sharp swings but have not reversed the overall trend.
Market Outlook and Risks Ahead
Market participants expect the rupee to remain under pressure in the near term unless there is clarity on trade negotiations or a reversal in foreign investment flows. Any easing in global financial conditions or renewed investor confidence in Indian assets could provide relief.
For now, currency markets remain cautious, with investors closely watching global cues, US economic data, and developments related to trade discussions that could influence the rupee’s trajectory.
