Rupee hits record low amidst dollar strength, outflows

The Indian rupee plunged to a record low on Tuesday, pressured by a combination of factors, including a strengthening US dollar and foreign fund outflows.

The currency weakened to 84.4125 before recovering slightly to close at 84.3925. This marked the fifth consecutive session of record lows for the rupee.

The recent surge in the US dollar index, which has gained 1.8 per cent this month, has adversely impacted emerging market currencies, including the rupee.

Additionally, significant foreign portfolio investor outflows from Indian equities have put further pressure on the currency.

Indian state-run banks intervened in the foreign exchange market to support the rupee, offering dollars at 84.40 levels. However, analysts anticipate the rupee to weaken further, potentially reaching 84.50 in the near term.

Attribution: Reuters

Subediting: M. S. Salama