The Indian rupee hits record low at 84.28 against the US dollar, marking its biggest fall in four months. Despite RBI’s intervention, the dollar's global strength is causing widespread currency struggles.
After Trump’s recent victory, the rupee has seen its biggest drop in four months, slipping by 17 paise or 0.2% to hit 84.28 against the U.S. dollar. Despite this record low, the rupee managed to perform relatively well when compared to several other global currencies, as the dollar’s strength grew significantly.
RBI’s Intervention Helps Limit the Rupee’s Decline
According to currency dealer’s news, intervention by the Reserve Bank of India (RBI) helped to somewhat cushion the rupee’s decline. RBI Governor Shaktikanta Das reassured the public that the Indian economy and financial sector are strong and prepared to handle any outside challenges that may arise, even amidst shifts caused by the U.S. elections. “What happens around the world affects us too,” said Das. “But in our own domestic market, we are not mere spectators; we are very much present,” he added. [Indian Rupee Hits Record Low]
However, some dealers believe that even with RBI’s substantial foreign exchange reserves, nearly $700 billion, it may be difficult to maintain the exchange rate at this level due to the dollar’s steep rise. The dollar index climbed 1.8% as worries about potential tariffs and sanctions affected other currencies across the globe.
Indian Rupee Hits Record Low as Global Currencies Face Sharp Losses
The Mexican currency was among the hardest-hit, plunging to a two-year low. The euro, too, faced a steep fall, dropping over 2%, as the eurozone is seen as a key target in potential trade battles under Trump’s administration. Similarly, China’s yuan saw a 1.1% decline, marking its biggest single-day drop since October 2022, due to concerns over possible tariffs. The South African rand joined the list of affected currencies, with a 2.2% dip from its prior close.
As the dollar’s strength continues to influence markets worldwide, the RBI’s involvement may play a crucial role in supporting the rupee and mitigating potential economic impacts. However, it remains to be seen if RBI’s strategies will be enough to stabilize the rupee in this increasingly volatile market.
