Indian rupee hits record low amid Adani Group woes

The Indian rupee hit a record low on Thursday due to outflows from local stocks, driven by a drop in Adani group shares. Uncertainty about the Federal Reserve’s rate policy also contributed to the decline.

The rupee closed at 84.4925, marking a near 0.1 per cent decline on the day.

The benchmark BSE Sensex and Nifty 50 indices also dropped 0.5 per cent and 0.7 per cent, respectively, with Adani group stocks bearing the brunt of the sell-off following the indictment of billionaire Gautam Adani by US authorities.

The dollar index strengthened as investors sought clarity on the incoming administration’s economic policies and the future trajectory of US interest rates. Expectations for a December rate cut by the Fed have diminished.

Analysts suggest that persistent dollar strength, portfolio outflows, and concerns about a potential slowdown in the Indian economy may continue to exert downward pressure on the rupee.

Geopolitical tensions, including the ongoing Russia-Ukraine conflict and Russia’s recent missile launch, also contribute to the overall market uncertainty, potentially impacting the rupee’s performance.

Attribution: Reuters

Subediting: Y.Yasser