Mumbai: The Indian rupee extended its downward trend in early trading on Monday, slipping sharply to a historic low of 93.94 against the US dollar, weighed down by global uncertainties and persistent capital outflows.
Opening weaker at 93.84 in the interbank foreign exchange market, the domestic currency quickly lost further ground, declining by 41 paise compared to its previous close. The latest fall comes just days after the rupee breached the 93 mark for the first time, highlighting the sustained pressure on the local unit.
Market participants attributed the depreciation to a combination of factors, including elevated crude oil prices linked to tensions in West Asia and the continued strength of the US dollar in global markets. India, being a major importer of crude, faces higher import bills when oil prices rise, which in turn increases demand for dollars.
According to treasury expert Anil Kumar Bhansali, the scale of the rupee’s decline reflects the rising cost of crude imports, particularly from Gulf nations. He noted that while the Reserve Bank of India has been active in the currency market, it has largely allowed the rupee to adjust amid strong dollar demand.
Analysts believe the central bank could step in more aggressively if volatility intensifies, though pressure from oil importers and foreign portfolio investors is expected to persist.
Meanwhile, the US dollar remained firm, with the dollar index—tracking its performance against a basket of major currencies—hovering near 99.66. In commodities, Brent crude prices were slightly lower in futures trading but continued to stay at elevated levels overall.
Domestic equity markets mirrored the weak sentiment. The benchmark BSE Sensex dropped over 1,300 points in early trade, while the Nifty 50 declined by more than 400 points, reflecting broad-based selling.
Foreign institutional investors remained net sellers, offloading equities worth over ₹5,500 crore in the previous session, adding further strain on the currency.
Adding to concerns, India’s foreign exchange reserves saw a notable decline, falling by over $7 billion to $709.76 billion for the week ending March 13, according to data released by the central bank.
With global headwinds persisting and capital flows remaining uncertain, the rupee is expected to remain volatile in the near term.
