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Rupee Hits All-Time Low
Context
The Indian rupee dropped to a record low of 85.80 per US dollar. It later closed at 85.52. This is the fourth consecutive day of decline for the rupee.
Key Reasons for the Fall:
- Dollar Strength: The US dollar has been strengthening globally, partly due to higher US Treasury yields (around 50% for 10-year bonds), making the dollar more attractive to investors.
- Dollar Demand from Importers: Indian importers need more dollars to pay for goods and services at the month-end, increasing demand for the greenback.
- Capital Outflows: Foreign Institutional Investors (FIIs) sold shares worth Rs 2,376 crore on Thursday, leading to outflows from the Indian market, which increases the demand for dollars.
- Crude Oil Prices: While crude oil prices rose slightly, they continue to put pressure on the rupee since India imports a large amount of oil and needs more dollars for payment.
Fact Box:What is Rupee's Decline?
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