Indian Rupee Hits Record Low Amid Economic Pressures
Rupee sinks past 95.73 per US dollar to hit lifetime low as persistent outflows wipe comfort from gold duty hike
The Economic Times
Image: The Economic Times
The Indian rupee has fallen to a record low of 95.7450 per US dollar, driven by ongoing outflows linked to overseas debt repayments and increased demand from importers. This decline comes despite a recent hike in gold import duties, as rising energy prices and economic forecasts weigh heavily on India's financial outlook.
- 01The rupee has reached an all-time low of 95.7450 per dollar.
- 02The decline is attributed to persistent outflows and importer hedging demand.
- 03Rising energy prices due to the U.S.-Iran conflict are impacting India's economy.
- 04Economists are revising growth forecasts downward and raising inflation projections.
- 05The currency's pressure is expected to continue in the near future.
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On Wednesday, the Indian rupee fell to a record low of 95.7450 per US dollar, surpassing its previous low of 95.7375 set the day before. This decline is primarily driven by ongoing outflows related to overseas debt repayments and increased demand from importers hedging against currency fluctuations. The recent hike in duties on gold imports failed to provide the expected support to the rupee. Additionally, a sustained rise in energy prices, exacerbated by tensions from the U.S.-Iran war, has clouded India's macroeconomic outlook, leading to concerns over the external sector. Economists have responded by lowering growth forecasts and increasing inflation expectations, indicating that the rupee may face continued pressure in the coming period.
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The depreciation of the rupee could lead to higher import costs, affecting prices for consumers and businesses reliant on imported goods.
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