The rupee fell to a new all-time low on Monday, weighed down by heavy hedging by importers and increased speculative bets in the market.
The fall also came as investors reacted to the recent move by the United States to raise tariffs on goods, which has added to concerns over India’s trade and fiscal outlook.
The rupee slipped to 88.33 against the US dollar during trading on Monday. This breached the previous record low of 88.3075 touched last Friday. Market analysts said the latest fall was a continuation of the pressure seen at the end of last week, with traders taking more short positions on the rupee.
US Treasury Secretary Scott Bessent had earlier mocked the rupee, saying that it cannot beat the dollar.
US Treasury Secretary Scott Bessent downplayed the Indian rupee's prospects as a global currency. When asked by the Fox News anchor, "Do you worry that India will trade in the rupee and not the dollar?" Bessent responded, "There are a lot of things I worry about. The rupee becoming a reserve currency is not one of them."
Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, said earlier, “As pressure mounted after the US implemented tariffs on Indian products, raising concerns over a widening fiscal deficit."
"While the upcoming GST council decision is expected to lend some support, markets are awaiting clarity on the final GST changes before taking a decisive view. Sentiment remains weak, and the rupee is expected to trade within a range of 87.65–88.45," he added.
