The Indian rupee declined by 47 paise to close at 88.69 against the US dollar on Thursday, pressured by hawkish monetary signals from the US Federal Reserve and subdued global market sentiment. The currency’s depreciation reflects investor concerns over rising interest rates and uncertain economic growth prospects.
Indian rupee falls 47 paise to 88.69 vs US dollar amid Federal Reserve’s hawkish tone and weak global markets impacting investor sentiment.
Mumbai: The Indian rupee weakened by 47 paise to settle at 88.69 against the US dollar on Thursday, marking a notable decline influenced by the Federal Reserve’s hawkish stance and weakening global market conditions. Market participants pointed to the Fed’s recent indication of maintaining higher interest rates for an extended period as a key factor dampening investor sentiment and prompting capital outflows from emerging markets, including India. Analysts noted that the rupee’s depreciation stems from increased demand for the US dollar amid expectations of further rate hikes expected to bolster the greenback’s strength. Alongside, weakened global equities and cautious risk appetite have contributed to the rupee’s slide. The domestic currency opened lower and remained under pressure throughout the trading session before closing near its session low. Forex dealers indicated that foreign institutional investors have been selling Indian assets amid the uncertain economic landscape abroad. “The Federal Reserve’s persistently hawkish tone has increased expectations of prolonged tight monetary policy, which is leading to strong dollar demand and weighing on emerging market currencies, including the Indian rupee,” said a senior forex analyst at a Mumbai-based brokerage. Meanwhile, crude oil prices remained elevated, adding further strain on the current account and putting additional pressure on the rupee. Continued capital outflows and cautious investor outlook have limited the scope for rupee recovery in the near term. Domestic equity markets also reflected this negative sentiment, which further influenced currency movement. Experts suggest that unless there is a significant improvement in global risk appetite or a shift in US monetary policy, the rupee is likely to remain under pressure against the US dollar. The Reserve Bank of India (RBI) is expected to monitor currency volatility closely while maintaining measures to ensure stability. In summary, the rupee’s 47 paise decline to 88.69 against the dollar on October 30 encapsulates the impact of global monetary tightening and subdued market sentiment on India’s external value, emphasizing the challenges faced by emerging market currencies amid a strong US dollar environment.
