Mumbai: The Indian rupee slipped to a fresh record low on Friday, touching 90.52 against the United States dollar as pressure from weak trade sentiment, foreign outflows and strong demand for dollars continued to weigh on the currency.
Traders said the fall was driven mainly by delays in India United States trade negotiations and uncertainty over high tariffs imposed on Indian goods. The ongoing stalemate has reduced confidence among investors and added stress on the rupee, which has been weakening steadily over the past several weeks.
Market analysts explained that large foreign capital outflows from Indian equities and bonds have also added to the pressure. Many firms are buying more dollars to cover import payments and overseas obligations, which has increased demand for the US currency.
The Reserve Bank of India has stepped in several times this week to slow the rupee's decline by selling dollars in the market. However, the central bank is expected to allow some controlled weakening in order to manage volatility and avoid sudden sharp swings.
Financial experts believe the rupee may stay under pressure in the short term unless there is a breakthrough in trade talks with the United States or a change in global market conditions. They added that any improvement in foreign investment flows could help stabilise the currency in the coming weeks.
The rupee's continued slide past the 90 mark is being closely watched by businesses and households, as a weaker currency can make imports costlier and add to inflation concerns across the economy.