Rupee slide continues: Currency tumbles to fresh life

The Indian rupee hit a record low of 90.52 against the US dollar on Friday, extending its sharp decline this year. This weakness is attributed to a widening trade deficit, strong corporate dollar demand, and US tariffs. The Reserve Bank of India has intervened to stabilize the currency, which has lost over 5% this year.
Rupee slipped to a record low of 90.52 against the US dollar, in early trade on Friday, extending its sharp decline this year amid ongoing challenges in the India-US trade talks. This comes after the currency fell 90.46 against the dollar on Thursday, breaching its previous record of 90.42, which was set on December 4. Experts have pointed to multiple factors behind rupee’s weakness, including a widening trade deficit, strong corporate demand for dollars, and heavy US tariffs of 50% on Indian goods. This year alone, rupee has lost over 5% against the dollar, ranking as the third-worst performer among 31 major global currencies, trailing only the Turkish lira and Argentina’s peso. This comes even as the dollar index has eased by more than 7%. Crossing the 90 mark is significant, as it represents half of rupee’s value from 2011, a point analysts say increases challenges for RBI governor Sajay Malhotra and his team in balancing currency flexibility with market stability. The RBI plays a central role in the currency’s international trading, including via non-deliverable forwards (NDFs) settled in dollars. Interventions are carried out through the Bank for International Settlements, in partnership with select major banks across trading hubs such as Singapore, Dubai, and London.
End of Article