Post by : Badri Ariffin

On Wednesday, the Indian rupee slipped past the significant level of 90 per dollar, reflecting the pressures from sluggish trade and ongoing capital outflows. The partially convertible rupee recorded a nadir of 90.14 early in trading but rose slightly later to 90.00.

This decline is attributed to persistent macroeconomic challenges in India. The nation is grappling with widening trade deficits, a slowdown in nominal GDP growth, and diminished foreign investments, all contributing to the currency's downward movement.

Analysts cite ongoing trade disputes with the United States as a factor worsening the rupee's standing. With India facing some of the highest U.S. tariffs globally, a lack of progress in negotiations leaves the currency in a precarious position.

Experts observe that the Reserve Bank of India (RBI) is taking a measured stance. Its interventions are aimed at stabilizing the rupee while refraining from overextending resources, especially in light of current forward contract positions. While ample foreign reserves and increasing gold holdings offer some cushion, persistent portfolio outflows may test these strategies.

Market experts suggest that the rupee's weakness could persist in the short term. Although a favorable outcome in India-U.S. trade discussions could provide temporary relief, ongoing structural issues surrounding trade and capital flows will continue to sway the currency's value. Seasonal trends and a potential weakening of the dollar next year may offer slight support, yet volatility is likely to remain a constant in the INR market.

As India navigates this tumultuous currency landscape, traders and enterprises are closely watching macroeconomic shifts, foreign investment patterns, and international trade negotiations that will likely impact the rupee's path in the upcoming months.

#Global News #India News #Share Market