Rupee Vs US Dollar: Continuing the downfall, the Indian currency--Rupee-- slipped below the crucial 96 mark in intraday trade on Friday against the US dollar. The persistence decline is pressured by elevated crude oil prices, a strong dollar and hawkish comments from US policy makers. 

What Are Reasons Behind Rupee Freefall?

FII Outflow: The rupee has been witnessing tremendous pressure due to persistent outflows of foreign capital from the equity market and subdued FDI inflows. These two are exerting pressure on the balance between the USD and the Indian Currency.

Middle East Crisis: The Ongoing global uncertainties have created a situation of fear among investors as they have turned cautious, investing in Indian equities due to relatively high valuations and the lack of AI-led investment opportunities.

"The ongoing geopolitical uncertainty and energy-driven macro pressures continued to fuel strong dollar demand globally, pushing the rupee beyond the ₹96 mark against the U.S. dollar for the first time. The sharp currency weakness has amplified investor anxiety over India’s rising import bill, worsening inflation trajectory, and potential slowdown in economic growth at a time when the macroeconomic environment is already under severe strain," said  Ponmudi R, CEO of Enrich Money. 

Also Read: Stock Market Settles Lower As Fuel Price Hike, Rupee Decline Weigh On Sentiment; Sensex Drops 160 Points

Rupee Falls 50 Paisa

At the interbank foreign exchange, the rupee opened at 95.86 and fell further in intraday trading, falling 50 paise from its previous close to a record low of 96.14. Meanwhile, the rupee closed at 95.86on Friday. 

Earlier on Thursday, the rupee touched a new record low of 95.96 against the US dollar before closing marginally up 2 paise at 95.64.

"Rupee traded weak by 11 paise near 95.95 after slipping below the 96.00 mark intraday, pressured by rising crude oil prices, which continue to weigh on import costs and inflation concerns. Market participants remain cautious amid fears that elevated crude prices may persist for a longer duration despite government measures to control volatility. Near-term rupee range is expected between 95.55–96.25," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.