Mumbai: The Indian rupee remained weak on Monday and is expected to drift lower in the coming days as foreign investor activity stays subdued and bond markets remain volatile.
The rupee has been trading near record low levels against the US dollar, reflecting steady outflows by foreign portfolio investors from both equities and debt markets. Traders say the currency is under pressure due to a mix of global uncertainty and domestic factors, including limited fresh inflows and cautious sentiment toward emerging markets.
Foreign investors have continued to reduce their exposure to Indian assets in December, adding to the heavy selling seen earlier this year. This has weighed on the rupee and also pushed government bond yields higher, as overseas investors trim holdings amid high global interest rates and weak risk appetite.
The bond market has seen sharp swings in recent sessions. The central bank has stepped in with bond purchases to ease stress and support liquidity, but market participants say foreign selling pressure remains a major concern.
Analysts expect the rupee to trade in a narrow but weak range in the near term. Although the US dollar has softened slightly against some global currencies, that relief has not fully reached the rupee due to ongoing capital outflows and uncertainty around global growth and trade developments.
For now, investors remain cautious and are waiting for clearer signals from economic data and central bank policy. Unless foreign inflows improve or global conditions turn more supportive, the rupee is likely to stay under pressure as the year draws to a close.