Currency Weakness: Rupee Drops Below 94 Against USD

Rupee Falls to Record Low of 93.94 Against US Dollar​

The rupee declined sharply on Monday, reaching a record low of 93.94 against the US dollar. The depreciation was driven by the ongoing war in West Asia, which has kept global crude oil prices elevated, and the strength of the US dollar.

Factors Contributing to the Rupee's Decline​

Foreign fund outflows and a downturn in the domestic equity market during the morning session further contributed to the rupee's weakness. At the interbank foreign exchange market, the rupee started at 93.84 against the US dollar before falling to its record low of 93.94, a decrease of 41 paise from the previous close.

The rupee previously breached the 93 mark on Friday, falling by 64 paise to settle at an all-time low of 93.53.

According to Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, India is currently paying USD 50 more per barrel for crude oil imports from the Gulf. He noted that the Reserve Bank of India was present in the market but allowed the rupee to fall due to high demand for dollars.

Market Performance and Forex Reserves​

The dollar index, measuring the US dollar's strength against six currencies, was up 0.02 per cent at 99.66. Brent crude, the global oil benchmark, traded 0.60 per cent lower at USD 112.90 per barrel in futures trade.

On the domestic equity front, the Sensex fell by 1,306.27 points, or 1.75 per cent, to 73,226.69, while the Nifty decreased by 418.25 points, or 1.81 per cent, to 22,696.25.

Foreign institutional investors sold equities worth Rs 5,518.39 crore on a net basis on Friday.

India's foreign exchange reserves decreased by USD 7.052 billion to USD 709.759 billion during the week ended March 13, as reported by the Reserve Bank of India on Friday.