Rupee falls to fresh record low against US dollar amid global market pressures

The Indian rupee weakened further on Wednesday, slipping to a fresh all-time low of 96.90 against the US dollar in early trade as rising crude oil prices and continued strength in the American currency rattled market sentiment.

The domestic currency opened at 96.89 in the interbank foreign exchange market before falling to 96.90, down 20 paise from Tuesday’s close.

The latest decline follows an already sharp fall in the previous session, when the rupee dropped 50 paise to settle at a record low of 96.70 against the dollar, marking its eighth consecutive day of losses.

Forex traders attributed the weakness to mounting geopolitical tensions between Iran and the United States, which have pushed up global oil prices and increased demand for the dollar as a safe-haven asset.

The dollar index, which measures the strength of the greenback against a basket of six major currencies, edged up 0.01 per cent to 99.262.

Meanwhile, Brent crude futures remained elevated at USD 110.59 per barrel despite easing 0.35 per cent in trade. Higher oil prices are particularly concerning for India, which imports the majority of its crude requirements, placing added pressure on the current account and the rupee.

Domestic equity markets also came under pressure, further dampening investor confidence. The Sensex fell 517.11 points to 74,667.51 in early trading, while the Nifty declined 152.45 points to 23,475.80.

Foreign institutional investors also turned net sellers after three straight sessions of buying. According to exchange data, FIIs sold equities worth Rs 2,457.49 crore on Tuesday, adding to pressure on both the currency and stock markets.

Market participants are expected to closely monitor geopolitical developments, crude oil movements and global currency trends for further direction in the rupee.

With IANS inputs