Rupee Plunges to Historic Low of 86.62 Against US Dollar

The Indian rupee experienced its steepest single-day decline in nearly two years, falling 58 paise to close at a record low of 86.62 against the US dollar on January 13, 2025.

Key factors contributing to this depreciation include:

  • Surging Crude Oil Prices: Brent crude rose by 1.44% to $80.91 per barrel, increasing India's import bill and exerting pressure on the rupee.

  • Robust US Economic Data: Stronger-than-expected US job growth has bolstered the dollar, leading to a broader selloff in Asian currencies.

  • Foreign Institutional Investor (FII) Outflows: Significant withdrawals by FIIs from Indian equities have further weakened the rupee.

  • Diminishing Forex Reserves: India's foreign exchange reserves have declined for the fifth consecutive week, reaching a 10-month low of $634.59 billion as of January 3, limiting the Reserve Bank of India's capacity to intervene effectively.

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