The Indian rupee declined by 2 paise to settle at a new all-time low of 95.25 against the US dollar on Tuesday, as persistent dollar demand and global headwinds weighed on the local currency.
Intra-day Movement
At the interbank foreign exchange market, the domestic unit opened at 95.30 per dollar and immediately came under selling pressure. During the trading session, the rupee touched an intra-day low of 95.44, marking its weakest level ever. It later recovered some ground to close at 95.25, down 2 paise from the previous close of 95.23.
Factors Behind the Decline
Forex traders attributed the rupee's fall to strong demand for the greenback from importers and foreign portfolio outflows. Additionally, a strengthening dollar index and rising crude oil prices added to the currency's woes. The sustained depreciation reflects concerns over India's trade deficit and global monetary tightening.
Market Outlook
Analysts expect the rupee to remain under pressure in the near term, with the 95.50 level acting as a key support. The Reserve Bank of India's intervention through dollar sales may provide some cushion, but sustained foreign fund outflows and geopolitical uncertainties could keep the currency volatile.
