Indian rupee hits record low vs USD on Thursday

The Indian rupee fell to a lifetime low of 85.2525 per US dollar on Thursday, marking its seventh consecutive session of decline. Weighed down by a widening trade deficit and weak capital flows, the rupee has lost 1.74 per cent since October, heading for its worst quarterly performance since Q3 2022.

India’s trade deficit surged 18.4 per cent year-on-year from April to November, while equity and debt outflows of $10.3 billion this quarter reversed $20 billion inflows from the previous quarter. The Balance of Payments (BoP) is expected to record a deficit of $20-30 billion this fiscal year, compared to a surplus of $60 billion last year.

The rupee remains under pressure from BoP outflows and a strong US dollar, fueled by expectations of economic growth and inflation under President-elect Donald Trump. IDFC First Bank forecasts the rupee could weaken further to 86 per dollar by September 2025.

Attribution: Reuters

Subediting: M. S. Salama