Indian rupee hits lifetime low of 91.18 against US dollar
What's the story
The Indian rupee has hit a new record low of 91.18 against the US dollar today. The fall comes amid global risk-off sentiment and heightened geopolitical tensions over Greenland, which have raised fears of potential trade friction between the US and Europe. Despite intervention by the Reserve Bank of India (RBI), the rupee remains under pressure as investors flock to safe-haven assets.
Market response
Rupee's vulnerabilities make it sensitive to global shocks
Currency traders have observed that the rupee's existing vulnerabilities make it particularly sensitive to global shocks. "The rupee is already under strain, so risk-off events hit it harder than many other Asian currencies," a trader said. This sensitivity has made the currency's movement a closely watched indicator in recent sessions, with analysts predicting continued influence from global developments on its trajectory.
Market impact
Rupee's decline rattles stock market and prompts foreign sell-off
The rupee's decline has also affected the stock market, with Sensex falling over 1,000 points and Nifty losing 353 points on Tuesday. Major foreign institutional investors have sold off thousands of crores worth of Indian stocks amid global uncertainty and expectations that the US may keep its money policies loose. The RBI has intervened to slow down this fall, but volatility remains high in the currency market.
Future outlook
Analyst predicts rupee's range amid global uncertainties
Analyst Anuj Choudhary of Mirae Asset ShareKhan has predicted that the rupee will trade in a range of 90.70-91.25 for now. This prediction is based on the expectation that markets will closely monitor US trade moves and oil prices. Brent crude is currently at $63.94 a barrel, which could keep things unpredictable for some time to come.