GUWAHATI: The Indian rupee continued its downward trend in trading, falling to an all-time low of 84.4975 per US dollar on Friday, November 22.
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This decline comes amid a surge in the US dollar, driven by a rally that gained momentum following Donald Trump’s victory in the recent US presidential elections. Fueled by expectations that Trump’s economic policies could stoke inflation and reduce the need for future Federal Reserve cuts, the greenback has strengthened over 3% since November 5.
Adding to the rupee’s trouble, foreign investors have pulled over $4 billion from Indian equities and bonds this month. The rupee’s further depreciation has only been arrested by interventions from the Reserve Bank of India (RBI).
However, in comparison, other Asian currencies have seen steeper losses of 0.9% to 2.2% during the same period.
"A strong dollar continues to create a depreciating bias for currencies globally," said Rajani Sinha, chief economist at CareEdge Ratings. However, she added that the RBI's interventions are bolstered by India's robust foreign exchange reserves, which should help manage rupee volatility.