New Delhi— The rupee dropped 28 paise to an all-time low of 90.43 against the US dollar in early trade on Thursday, pressured by heavy foreign institutional investor outflows and limited intervention from the Reserve Bank of India. Forex analysts said the central bank appears cautious ahead of Friday’s Monetary Policy Committee decision, while strong dollar demand from importers continues to weigh on the currency.
The rupee opened at 90.36 at the interbank foreign exchange market before slipping to its new record low. On Wednesday, it had breached the 90-per-dollar mark for the first time, closing at 90.15.
Chief Economic Adviser V Anantha Nageswaran said the weakening rupee is not hurting inflation or exports, although he noted that import-intensive sectors like gems and jewellery, petroleum and electronics may face pressure due to rising input costs. He added that a weaker rupee supports outbound shipments but makes imports more expensive.
The dollar index rose 0.14 per cent to 98.99, while Brent crude futures were up 0.49 per cent at USD 62.98 per barrel. Traders said investors remain cautious amid ongoing trade tensions with the US, expecting clarity only towards the end of the year.
Analysts believe the rupee could slide further. Anil Kumar Bhansali of Finrex Treasury Advisors said it may touch 91.00 unless a trade deal materialises. He added that with the currency under pressure, an RBI rate cut on Friday appears unlikely.
Despite strong macroeconomic indicators — including better-than-expected GDP growth and an HSBC India Services PMI reading of 59.8 for November — currency markets remain focused on stability and policy clarity. Amit Pabari of CR Forex Advisors said investors now want clear guidance from RBI Governor Sanjay Malhotra, not just rate announcements.
Malhotra will announce the MPC’s decision on Friday amid easing inflation, robust GDP numbers, a sliding rupee, and continued geopolitical uncertainty.
In domestic markets, the Sensex rose 45.99 points to 85,152.80, while the Nifty inched up 14.35 points to 26,000.35 in early trading. Meanwhile, foreign institutional investors sold equities worth ₹3,206.92 crore on Wednesday.
