Rupee Hits All-Time Low At $85.85 As USD Strengthens Amid Market Volatility

The Rupee declined to a record low on Wednesday, attributed to a rise in the value of the dollar and weakness in domestic equities.

How much did the Rupee decline?

As of the latest data at 3:29 PM, the Rupee's exchange rate stood at 85.8562 against the dollar, according to Bloomberg.

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How much did the dollar increase?

The dollar index rose by 0.1%, driven by a fall in the Chinese yuan and a 0.4% decline in the Indonesian rupiah, as reported by Reuters.

Dollar sales by state-run banks helped moderate the Rupee's losses, but the interventions were relatively restrained, the report added.

What caused the Rupee to fall?

The Rupee's depreciation was primarily due to a strengthening dollar, influenced by the US Federal Reserve's hawkish stance in December.

While the Fed has projected a 50-basis-point rate cut in 2025, market participants are anticipating a more modest 38-basis-point reduction.

Additionally, volatility in the Indian stock market contributed to the Rupee's decline. Both the BSE Sensex and the NSE Nifty ended flat but remain in correction territory.

Foreign investors have already offloaded approximately $2 billion in equities and bonds this month, further pressuring the Rupee.