Rupee Hits Record Low Of 84.76 Against US Dollar In Early Trade

The decline comes on the heels of Monday's depreciation, where the rupee weakened by 13 paise to close at a record-low level of 84.73

The Indian rupee fell by 4 paise, in a significant drop, to hit an all-time low of 84.76 against the US dollar in early trading hours on Tuesday. The decline comes on the heels of Monday's depreciation, where the rupee weakened by 13 paise to close at a record-low level of 84.73. Analysts attributed the slump to disappointing macroeconomic data and the robust performance of the US dollar in global markets, which exerted pressure on the Indian currency.

The rupee's persistent decline reflects ongoing challenges for the Indian economy, including concerns over trade deficits and global market volatility. Traders will closely watch further developments in the currency market amid fluctuating international trends.

In the interbank foreign exchange market on Monday, the rupee opened at 84.59 and hit an intra-day low of 84.73 against the US dollar. By the end of the session, it closed at a record low of 84.73 (provisional), marking a decline of 13 paise from its previous close. 

Forex traders said the depreciation in rupee was largely on the back of Donald Trump's rhetoric on BRICs currency, political instability in the Eurozone, weaker domestic macroeconomic indicators and unabated foreign portfolio outflows.

President-elect Donald Trump on Saturday threatened a 100 per cent tariff on the BRIC bloc of nations if they act to undermine the US dollar.

Moreover, market participants are also awaiting cues from the upcoming RBI monetary policy on December 6, which will likely focus on balancing inflation and growth.

At the interbank foreign exchange, the rupee opened at 84.75 and moved in a tight range and touched all-time low of 84.76 against the greenback, registering a fall of 4 paise over its previous close.

Meanwhile, Minister of State for Finance Pankaj Chaudhary on Monday said in Parliament that the rupee remains one of the best-performing Asian currencies despite geopolitical tensions in the Middle East and other headwinds, indicating India's sound economic fundamentals.

One of the main reasons for the depreciation of INR has been the broad-based strength of the USD, he said.

"During CY 2024, Dollar Index has increased by about 4.8 per cent till November 19, 2024. More recently, the Dollar Index touched 108.07 on November 22, 2024, its highest in more than a year, exerting pressure on emerging market currencies," he said.