Rupee Slides to All-Time Low
The Indian rupee slipped to a record low of 92.00 against the US dollar in early trade on Thursday, extending its recent weakness amid a recovery in the American currency and pressure across Asian peers.
The rupee opened at 91.99 per dollar, weaker than its previous close of 91.78, as broad-based dollar strength and foreign capital outflows weighed on sentiment.
Dollar Recovers After Fed Signals
The move followed a rebound in the US dollar after the Federal Reserve kept interest rates unchanged. The Fed acknowledged that inflation remains elevated while the US labour market continues to stabilise.
Following the policy decision, US Treasury yields moved higher, lending support to the greenback. The dollar index, which tracks the US currency against a basket of six major currencies, recovered from four-and-a-half-year lows, even as it traded 0.29% lower at 96.16 during Asian hours.
Global Pressures Hit Emerging Currencies
Sustained foreign capital outflows, rising geopolitical uncertainty, and heightened risk aversion have kept emerging market currencies under pressure. The rupee’s slide reflects this broader trend rather than domestic factors alone.
Persistent selling by foreign institutional investors has added to the strain, reducing dollar supply and pushing demand higher in onshore markets.
Crude Oil Adds to Rupee Stress
A rise in crude oil prices further pressured the rupee. Brent crude gained 1.32% to $69.30 per barrel, while US West Texas Intermediate rose 1.38% to $64.08.
Higher oil prices typically widen India’s trade deficit, increasing dollar demand from oil importers and weakening the local currency.
Markets React Ahead of Key Domestic Events
Indian equity markets traded lower amid weak global cues. The Sensex fell 413.40 points, or 0.50%, to 81,931.28, while the Nifty 50 declined 122.35 points, or 0.48%, to 25,220.40.
Investor caution also remained high ahead of the presentation of the Economic Survey 2025–26 in Parliament, scheduled ahead of the Union Budget on February 1.
RBI Watch as 92 Becomes a Critical Level
Market participants see the 92.00 mark as a key psychological and technical level for the rupee.
Jigar Trivedi, Senior Research Analyst at IndusInd Securities, said the Reserve Bank of India may step in around this zone. He noted that support for the rupee could emerge near 91.70, while resistance above record levels lies around 92.20.
Near-Term Outlook for INR
Currency strategists remain divided on whether the rupee will stabilise or weaken further.
Amit Pabari, Managing Director at CR Forex Advisors, said persistent capital outflows have kept dollar demand elevated. He warned that a sustained move above 92.00 could open the path toward the 92.20–92.50 range.
At the same time, he said potential RBI intervention and a broadly softer dollar environment could limit further depreciation and gradually pull the pair back toward the 91.00–91.20 zone.
Upside Bias Still Intact
Ponmudi R, CEO of Enrich Money, pointed out that the technical structure for USD/INR remains constructive. He cited higher highs and higher lows, supported by policy divergence, continued foreign portfolio outflows, and macro stress on the dollar side.
As long as the currency pair holds above the 91.90–92.10 zone, he said, the positive bias remains intact, with gradual upside potential toward 92.50 and beyond in the coming weeks.
What Comes Next
In the near term, the rupee’s direction will hinge on RBI action, global dollar moves, crude oil prices, and foreign fund flows. While intervention risks rise near 92.00, broader global pressures suggest volatility is far from over.
For now, the rupee stands at a delicate inflection point. Whether this level marks a temporary pause or the start of a new range will depend on how swiftly support emerges.
Rupee Hits All-Time Low Of 92 Against US Dollar In Early Trade
Source: mint
Photo: Outlook Business
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