Rupee Hits Record Low of 85.06 Against US Dollar Amid Global Market Pressures

The Indian rupee slumped to a fresh all-time low of 85.06 against the US dollar in early trade on Thursday. This decline came amid persistent dollar demand and global market uncertainties ahead of the US Federal Reserve’s policy decision. Key Drivers Behind the Fall The rupee’s depreciation was driven by multiple global and domestic factors. On the international front, anticipation of the US Federal Reserve’s interest rate decision fueled dollar buying, strengthening the greenback against major currencies. Domestically, India’s widening trade deficit added to the pressure. November saw a sharp rise in gold imports, which surged four-fold to $14.86 billion due to festive and wedding season demand. Meanwhile, India’s exports contracted by 4.85% year-on-year to $32.11 billion, pushing the trade deficit to a record $37.84 billion. Market Movements At the interbank foreign exchange market, the rupee opened at 84.92 against the US dollar and touched an intraday low of 85.06. It settled at 84.94 on Wednesday, marking a provisional record low close. The US dollar index, which tracks the greenback against a basket of six major currencies, rose 0.04% to 107, reflecting the dollar’s continued strength. In the commodities market, Brent crude oil futures also gained 0.60%, trading at $73.63 per barrel. Indian Polymer Market Impact The Indian polymer market prices are determined by international prices in USD terms. A depreciating rupee leads to higher expenditure in rupee terms. Crude oil and natural gas, major raw materials for polymer production, are largely imported in USD terms, causing Indian polymer producers to face headwinds from rising input costs.