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Rupee hits record low of 87.94 against US dollar, further decline expected: Reports

February 10, 2025, 12:11 pm

The rupee on Monday slipped the most in six weeks after 44 paise to a record low of 87. 94 against the US dollar with early trading. This means another blow for the Indian currency that has already become Asia’s weakest performer in 2024 and hit several record lows based on a Bloomberg report that cited a Nomura brokerage.

Reasons for the Rupee’s Decline

The rupee’s downward trajectory is expected to continue, as the Reserve Bank of India (RBI) is likely to persist with its strategy of increasing foreign exchange reserves, according to the Bloomberg report. “With the RBI maintaining its FX stance, we see a risk of rupee underperformance, as the central bank may continue to favor building a substantial FX reserves buffer,” Nomura noted.

The RBI’s choice to reduce the benchmark repo rate by 25 basis points to 6. 25% from 6. 5% last week, coupled with the sustained strength of the US dollar, has exerted extra pressure on the rupee. This rate reduction, which was the first in almost five years, occurred as India’s GDP growth decelerated to 5. 4% in Q2 of FY 2024-25, the slowest in seven quarters. The statement even added that further inflation contracted to a four-month low of 5. 22% in December 2024.

According to a Bank of Baroda report available with ANI news agency, the RBI could cut rates by another 50 basis points in 2025 and flip its stance from “neutral” to “accommodative” while the timing is less certain. “As RBI kicks off the rate cut cycle, one can very well expect that the cuts would continue, but the timing would be debatable. Altogether, we are assuming a 75bps reduction in this calendar year,” the report said.

Along with the 25bps rate cut last week, the RBI also lowered the Standing Deposit Facility (SDF) rate to 6% and the Marginal Standing Facility (MSF) rate to 6. 5%, upholding a “neutral” policy stance.

Rupee Drops to Record Low as Dollar Strengthens and Markets Remain Unsteady

January 9, 2025, 9:04 am

The Indian Rupee dropped to a record low on Wednesday, driven by a strengthening U.S. dollar and weakness in domestic equities.

By How Much Did the Rupee Fall?

As per Bloomberg data, at 3:29 PM, the Rupee was trading at 85.8562 against the dollar, marking its lowest value to date.

By How Much Did the Dollar Rise?

The dollar index recorded a 0.1% increase, supported by a decline in other currencies like the Chinese yuan and a 0.4% dip in the Indonesian rupiah, according to a Reuters report.

Dollar sales by state-run banks helped contain the Rupee’s losses, but these efforts were described as “not very aggressive,” the report added.

What Caused the Rupee to Decline?

The Rupee‘s depreciation was attributed to the dollar’s strength, bolstered by the U.S. Federal Reserve’s hawkish stance in December. The Fed’s approach led to increased investor confidence in the dollar.

Additionally, while the Federal Reserve has indicated a potential 50 basis-point rate cut in 2025, investors are only pricing in a 38 basis-point reduction, which also supported the dollar’s rise.

Domestic factors further compounded the pressure on the Rupee. Indian equity markets have exhibited recent volatility, with both the BSE Sensex and NSE Nifty trading flat but remaining in correction territory. Foreign investors have sold approximately $2 billion in equities and bonds this month, adding to the currency’s woes.

Top 10 Oldest Currencies Still In Use Today—History Of The Indian Rupee (INR)

September 16, 2024, 2:42 pm

The global currency market is ever-changing, with the foreign exchange market, known as forex (FX), as its primary platform for trading currencies across nations. Forex is the largest and most liquid market globally, handling trillions of dollars daily.

Unlike traditional markets, forex operates without a centralized location or single government oversight, making it unique in its structure and function. Despite its extensive use, the value and purchasing power of currencies can differ greatly.

Oldest Currencies Still in Use

There are approximately 180 currencies recognized as legal tender worldwide. While many are familiar with today’s major currencies, the oldest ones still in use may be less well-known.

The U.S. dollar, despite its global prominence, is not the oldest currency. The British Pound Sterling, which originated in the 12th century during King Henry II’s reign, is the oldest currency still in circulation. Following the British pound are the Serbian dinar and the Russian ruble, both established in the 13th century.

Top 10 Oldest Currencies Still in Use Today

The History of the Indian Rupee (INR)

The Indian rupee has a rich history dating back to around the 6th century BCE, when ancient Indian kingdoms began minting coins.

During the Mauryan Empire (322–185 BCE), standardized punch-marked coins were introduced, enhancing trade and commerce. The term “Rūpyarūpa” was first officially used during this period.

Rūpyarūpa

Under British rule, the currency system was controlled until India’s independence in 1947. The Indian rupee was then adopted as the national currency, and in 1957, the decimal system was introduced, dividing the rupee into 100 paise.

In October 1987, the Rs. 500 note was introduced featuring Mahatma Gandhi’s portrait, with the Lion Capital, Ashoka Pillar as the watermark.

500 rs note

In November 2016, Prime Minister Modi announced the demonetisation of Rs. 500 and Rs. 1000 notes to address black money and corruption, leading to the introduction of a new series of INR notes in different colors.

Ola’s Bhavish Aggarwal Idea To Replace Dollar Sign With Rupee On Keyboard Sparks Reaction

August 25, 2024, 10:23 am

Bhavish Aggarwal, the CEO of ride-hailing giant Ola, recently ignited a heated discussion on social media with a provocative post about keyboard design. On August 24, Aggarwal took to X (formerly Twitter) to question why the keyboard’s dollar sign ($) has not been replaced with the Indian rupee symbol (₹) in products sold in India. He shared an image of a keyboard highlighting the dollar sign and posed the question, “Maybe this has something to do with it! Wonder why the $ is not replaced with ₹ in products sold in India.”

HAVE A LOOK AT THE POST:

Maybe this has something to do with it! Wonder why the $ is not replaced with ₹ in products sold in India pic.twitter.com/LteKrcfd9b

— Bhavish Aggarwal (@bhash) August 24, 2024

Social Media Reaction: Mixed Responses

This Post of Bhavish Aggarwal quickly garnered significant attention, reaching over 1.1 million views. While some users supported his sentiment, many took to the comments section to challenge his viewpoint. Critics pointed out several reasons why the dollar sign remains prevalent on keyboards.

One commenter noted, “Patriotism and jingoism have a very small gap… You are crossing that. Don’t know whether you are doing it intentionally or unintentionally?”

Shivam Bhadani highlighted the technical reasons for retaining the dollar sign, stating, “The $ symbol is not just a currency symbol. It is embedded in many programming languages. For instance, variables are written as ${} in JavaScript and $1, $2 in bash syntax. If you want to make changes, start with yourself and replace ‘OLA’ with an Indian language word.”

Another user, Roshan Rai, suggested, “Change begins at home. Next time you give a presentation, use ₹ instead of $. Then come back and moral police other brands.”

Others voiced concerns about the appropriateness of using nationalism as a business strategy. One user commented, “Bro, doing business by playing the nationalism card is a big danger for investors.”

Setting and Effects

Aggarwal’s post comes amid ongoing discussions about national symbols and their place in everyday technology. While the rupee symbol was officially adopted in 2010, its integration into global tech products has been slow. The dollar sign, on the other hand, remains a staple in international finance and programming languages.

The debate underscores the complexity of balancing national pride with practical and global considerations in technology design. As post of Bhavish Aggarwal continues to spark discussion, it highlights the broader conversation about cultural representation in technology and business.

Bhavish Aggarwal’s social media post has certainly stirred a conversation about the representation of national symbols in technology. While his suggestion to replace the dollar sign with the rupee symbol has met with mixed reactions, it has brought to light the various factors influencing keyboard design and the role of symbols in global technology.

Pakistan rupee plunges to record low after Imran’s arrest

May 11, 2023, 5:02 pm

Imran Khan’s arrest triggered violence in most of the country. The military has taken a tough stance to crush protest, and in due course, Pakistan’s rupee plunged to a record low.

The rupee went down 3.3 percent, so now 300 Pakistani rupees are equal to a dollar on Tuesday, as per the foreign-exchange desk at Arif Habib Ltd. Dollar bonds due 2031 rose from their lowest since November on Thursday and were indicated at 33.44 cents on the dollar.

The Pakistani government has urged the military to come forward to squash the ongoing violent protests. The upheaval in the country erupted after a judge issued an order to put the veteran politician under the custody of the anti-graft agency for eight days.

Imran Khan was arrested on Tuesday. The turmoil in the country occurred when the government negotiated with the International Monetary Fund to begin a $6.5 billion rescue programme.

Chief executive officer at Link International Exchange Co Saleem Amjad, said that pressure had once again started after a few months of stability, and another delay in the IMF loan would mean a drop in payment.

The top court of Pakistan is ready to hear Imran’s plea against his arrest later today. In the current, violence, at least seven people have died and many have been injured in the last two days.

India’s Forex reserves saw steepest weekly decline in over 11 months

February 19, 2023, 2:14 pm

India’s foreign exchange reserves declined by USD 8.319 billion to USD 566.948 billion in the week ending on February 10, according to the Reserve Bank of India’s latest data.
This is reported to be the sharpest slump in the overall forex reserves in over 11 months. During the week that ended on February 3, the reserves declined by USD 1.494 billion to USD 575.267.
According to RBI’s latest data, India’s foreign currency assets, the biggest component of the forex reserves, declined USD 7.108 billion to USD 500.587 billion.Gold reserves declined by USD 919 million to USD 42.862 billion.At the start of last year 2022, the overall forex reserves were at about USD 633 billion.

Pakistani currency sees biggest 1-day slump in 20 years

January 27, 2023, 1:09 pm

The Pakistani rupee saw its biggest one-day decline in over two decades on Thursday. The country’s currency fell 9.6 per cent against the dollar on Thursday, according to the central bank of the South Asian country. The slump was so severe that it prompted the International Monetary Fund (IMF) to resume lending to the country.

The foreign exchange companies had removed a cap on the Pakistani rupee-dollar exchange rate. This was a key demand of the IMF as part of a programme of economic reforms it has agreed on with the debt-laden South Asian nation.

Federal Board of Revenue Chairman Asim Ahmed has termed the current financial situation in the country as ‘critical’, the Dawn reported on Friday.

“Economic situation [in the country] is critical and there is a shortfall in revenue. We will soon overcome the tax gap,” Ahmad said during his address at a function held at the Customs House here on Thursday to mark the International Customs Day, according to news agencies.

The lender announced on Thursday that it was sending a mission to the country at the end of January for discussing on the lines of resuming these disbursements.

Rupee at an all-time low against dollar

October 10, 2022, 4:38 pm

The Rupee has been falling weak against the US dollar in a row for quite some time now. The Rupee on Monday touched the new lowest vs the dollar, with an increased sell-off resulting from the good US jobs report which hints at more aggressive hikes from US Federal Reserve.

Rupee declined 37 paise, to a record low of 82.67 versus the US currency. Due to worries about FII outflows, rising oil costs, declining interest from domestic investors, rising US Treasury yields, and demand for the US dollar, the Indian rupee had been declining and recording record lows. In the week ending September 30, the nation’s foreign exchange reserves fell to $532.66 billion, the lowest level since July 2020. Last week, it was $537.5 billion.

The Reserve Bank of India’s (RBI) measures did little to stop the rupee’s slide. Traders claimed that as the local currency crossed the 82-mark for the first time, the central bank sold dollars via state-run banks.
The US labour market is slowing down, but an unexpected decline in the unemployment rate has raised hopes that the Federal Reserve would keep up its aggressive tightening of monetary policy, driving more capital to the dollar and driving away investors from other currencies.
On Monday, US Treasury rates increased as the US dollar index approached the 113 level.
After extending their surge with a nearly 4% increase on Friday to five-week highs, oil prices dropped on Monday. On Monday morning, domestic markets declined as the Sensex dropped more than 700 points in the early going.

Indian rupee falls 40 paise to a record low of 81.93 per US dollar

September 28, 2022, 12:29 pm

The rupee fell 40 paise to an all-time low of 81.93 against the US dollar in early trade on Wednesday, as the strengthening of the US currency and risk-averse investor sentiment weighed on the local currency.

Furthermore, a downward trend in domestic equities and significant foreign fund outflows dampened investor enthusiasm, according to forex traders. The rupee opened at 81.90 against the US dollar on the interbank foreign exchange, then fell to 81.93, a drop of 40 paise from its previous close.

The rupee consolidated in a narrow range on Tuesday, finishing 14 paise higher at 81.53 per dollar. According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the rupee opened weaker on Wednesday as the dollar resumed its upward momentum, supported by hawkish Fed talk.

According to Iyer, the local unit could track the weakness of its Asian and emerging market peers, and a delay in listing local bonds on a major global index this year could also limit gains.

“The Reserve Bank of India (RBI) may be present to curb volatility,” Iyer noted.

The dollar index, which measures the strength of the US currency against a basket of six currencies, rose 0.40 percent to 114.55.

Meanwhile, investors are anticipating the outcome of the RBI’s monetary policy meeting on Friday. Brent crude futures fell 1.33 percent to USD 85.12 per barrel, the global oil benchmark.

The 30-share BSE Sensex was trading 373.37 points, or 0.65%, lower at 56,734.15, while the broader NSE Nifty was down 108.20 points, or 0.64 percent, at 16,899.20.

According to exchange data, foreign institutional investors were net sellers in the capital market on Tuesday, offloading shares worth Rs. 2,823.96 crore.

Indian rupee gains 37 paise against the US dollar, reaching 81.30

September 27, 2022, 12:10 pm

The rupee rose 37 paise to 81.30 against the US dollar in early trade on Tuesday, as the US currency fell from its highs.

The domestic unit opened at 81.45 against the dollar on the interbank foreign exchange, then fell to 81.30, a 37-paise gain from its previous close.

The rupee fell 58 paise against the dollar on Monday, reaching an all-time low of 81.67.

According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the rupee strengthened against the dollar as the greenback took a breather.

Experts predict that the focus will now shift to the RBI’s meeting this week, with its decision due on Friday.

“Most Asian and emerging market peers have started mixed, but a positive start in the equity futures could aid sentiments. The dollar index was marginally weaker, while the Euro, Sterling and the Yen strengthened against the greenback in this Tuesday morning trade,” Iyer said.

Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, dropped 0.36 percent to 113.69.

Brent crude futures rose 0.57 percent to USD 84.54 per barrel, the global oil benchmark.

The 30-share BSE Sensex was trading 176.91 points, or 0.31 percent, higher at 57,322.13, while the broader NSE Nifty was up 55.95 points, or 0.33 percent, at 17,072.25.

According to exchange data, foreign institutional investors (FIIs) were net sellers in the capital markets on Monday, offloading shares worth 5,101.30 crore.

Rupee depreciates below 81-mark against US dollar in early trade, on a first

September 23, 2022, 11:27 am

The rupee fell 44 paise and fell below the 81-mark against the US dollar in early trade on Friday, weighed down by the strong US currency and risk-off sentiment among investors.

Forex traders said the escalation of geopolitical risk in Ukraine and rate hikes by the US Federal Reserve and the Bank of England to combat inflation had dampened risk appetite.

Furthermore, the strength of the US dollar in the international market, a downward trend in domestic equities, and risk-off sentiments as the geopolitical risk in Ukraine escalated weighed on the local currency.

The rupee opened at 81.08 against the US dollar on the interbank foreign exchange, then fell to 81.23, a 44-paise drop from its previous close.

The rupee fell by 83 paise on Thursday, its most significant single-day loss in nearly seven months, to close at an all-time low of 80.79 against the US dollar.

The Bank of England increased its key interest rate by 50 basis points (bps) to a 14-year high of 2.25 per cent.

The Bank of Japan intervened in the foreign exchange market for the first time in 24 years to stem a falling Yen after keeping rates at record lows, according to IFA Global Research Academy, while the Swiss National Bank hiked rates by a record 75 basis points to 0.5%.

The Federal Reserve of the United States raised interest rates by 75 basis points to 3-3.25 per cent.

On Thursday, the RBI was conspicuously absent from the spot market as the rupee fell by 1%, possibly because it wanted the rupee to catch up, according to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.

“All major events are over for this month as we await RBI’s MPC to give its verdict on September 30, 2022,” Bhansali added.

Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, rose 0.05 per cent to 111.41.

Brent crude futures fell 0.57 per cent to USD 89.94 per barrel, the global oil benchmark.

The 30-share BSE Sensex was trading 558.59 points, or 0.94 per cent, lower at 58,561.13, while the broader NSE Nifty was down 153.10 points, or 0.87 per cent, at 17,476.70.

According to exchange data, foreign institutional investors were net sellers in the capital market on Thursday, offloading shares worth Rs 2,509.55 crore.

Rupee hits record low against US dollar, prone to fall further: Analysts

September 22, 2022, 10:48 am

The Indian rupee is expected to fall further after reaching a record low against the US dollar on Thursday, as the US Federal Reserve hinted at more aggressive rate hikes to combat inflation. The rupee opened at a record low of 80.2850 per US dollar, down from 79.9750 the day before.

The Fed raised interest rates by 75 basis points, as expected. More importantly, it hinted that more hikes were on the way and that rates would remain high until 2024. Asian currencies began the day weaker, with the Chinese yuan falling below 7.10 per dollar.

“After the hawkish Fed Reserve commentary, the rupee is (set to fall)”, said Anil Bhansali, head of treasury at Finrex Treasury Advisors.

“The intervention from the central bank will remain crucial and they are expected to be present through the day. However, they may allow a closing for the pair above 80 today.”

If the RBI decides to take a step back, Samir Lodha, managing director at QuantArt Market Solutions, believes the rupee will suffer further losses.

“Once RBI allows INR to trade beyond 80 on a consistent basis, I expect rupee to head towards 82.0 in a couple of months on account of the trade deficit and due to global recession and money supply tightening,” Lodha said. It is possible that “rupee will depreciate further with RBI intervention to control it whenever required,” said Venkatakrishnan Srinivasan, founder and managing partner at Rockfor Fincap.

However, any potential RBI intervention may be less aggressive this time, according to Arnob Biswas, head of FX at SMC Global Securities.

“Given the Fed’s hawkish stance, the RBI may not be aggressive. Furthermore, a significant drop in net liquidity in the system may justify doing so “Biswas stated.

According to Dilip Parmar, research analyst at HDFC Securities, “even if the RBI steps in, it will only be a temporary support and will not change the direction.”

Meanwhile, Kunal Sodhani, vice president of Sinhan Bank’s global trading centre, stated “Stop losses may be triggered by a large number of option sellers. Needless to say, it will be interesting to see how the RBI responds from here “Sodhani explained.

Rupee at record low fell to the level of Rs 80 per US dollar for the first time

July 19, 2022, 3:55 pm

There was a massive fall in the Indian rupee on Tuesday; it fell to its lowest level, i.e. 80 rupees per dollar, for the first time. On the previous day, it closed at Rs 79.97 per dollar. This year, the US dollar is up 7.5 per cent against the Indian rupee.

After seeing the continuous fall in the rupee for the last few days, there was a doubt that the rupee would cross $80. In the previous session, i.e. on Monday, the rupee had depreciated by 16 paise at the inter-bank foreign exchange market and closed at 79.98 per dollar.

Since December 2014, the rupee has registered a depreciation of 25 per cent. Giving written information about the RBI figures in the Lok Sabha, Finance Minister Nirmala Sitharaman said that on December 31, 2014, the rupee was 63.33 against the dollar, which came down to Rs 79.41 per dollar on July 11, 2022. She also cited the Russia-Ukraine conflict, rising crude oil prices and pressure on global economic conditions as the root cause of the fall in the Indian rupee.

However, by informing the lower house of Parliament, the government said that the Indian currency has strengthened against other major global currencies.

The government said, “Currencies such as the British pound, the Japanese yen and the Euro have weakened more than the Indian rupee against the US dollar, and therefore, the Indian rupee has strengthened against these currencies in 2022.”

The continuous exit of foreign capital from the market and the rise in crude oil prices is the root cause of the fall in the rupee. Market analysts have expected the dollar-rupee price to be 79.79 and 80.20.