The Indian Rupee breached the psychological 90 per USD mark, setting a record low. Key factors include persistent FII outflows, a widening trade deficit, and US-India trade deal uncertainty. Analyze the immediate economic impact on inflation and import costs.
Indian Rupee Record Low 90 USD Causes Impact
The Indian currency market witnessed a historic moment today as the Indian Rupee (INR) breached the critical 90 per USD psychological barrier for the first time ever, hitting a fresh record low in early trade. This significant milestone, while partly due to the relentless depreciation trend seen in recent months, signals a troubling confluence of both domestic structural pressures and external global uncertainties. The breach of this key technical and emotional level has sent tremors across the financial community, necessitating a deep dive into the Indian Rupee Record Low 90 USD Causes Impact.
The primary factor driving the rupee’s downward spiral is the sustained and heavy exodus of capital by Foreign Institutional Investors (FIIs). Despite a strong domestic equity market sentiment and robust GDP growth numbers, foreign investors have been consistent net sellers of Indian equities and debt. This persistent capital outflow creates an immediate and heavy demand for the US Dollar, thereby mechanically pulling the Rupee lower. This pressure is compounded by the widening trade deficit, which has hit record highs. High global commodity prices—particularly for crude oil, metals, and bullion—have sharply inflated India’s import bill, creating a structural imbalance where the demand for dollars far exceeds supply.
