Rupee hits 86 against U.S. dollar, settles 14 paise lower

Rupee hits record low against dollar due to strong American currency, foreign fund outflows, and rising oil prices.

The rupee declined 14 paise and touched the crucial 86.00-mark (provisional) for the first time against the U.S. dollar on Friday (January 10, 2025) as it failed to resist pressure from a stronger American currency and huge outflow of foreign funds.

“Surging crude oil prices overseas and negative sentiment in domestic equity markets also weighed down the Indian currency,” forex traders said.

Also, dollar strengthened on increased demand amid the anticipation of restrictive trade measures by the new U.S. administration after President-elect Donald Trump takes over as president on January 20, 2025.

At the interbank foreign exchange, the rupee opened at 85.88, hit the intra-day peak of 85.85 before settling at the lowest-ever level of 86.00 (provisional) against the greenback, 14 paise lower from its previous close.

On Thursday (January 9, 2025), the rupee gained 5 paise to settle at 85.86 against the U.S. dollar, recovering from the steep decline of 17 paise in the preceding session.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee hit another record low as domestic markets continued to slide and FIIs outflows sustained. A strong U.S. dollar and surge in crude oil prices also pressured the rupee.

“Weak tone in the domestic markets, a strong greenback and persistent FII outflows may continue to put downside pressure on the rupee. Rising crude oil prices, as well as surge in the U.S. treasury yields may further weigh on the domestic unit.