Rupee Hits Record Low Against US Dollar Amid Surging Crude Prices and Foreign Investor Selloff

The Indian rupee fell to a new low against the US dollar on Monday due to rising crude oil prices and selling by foreign investors. The rupee dropped to 84.0725 per dollar, slightly lower than its previous record of 84.07 on Friday. It opened at 84.05 and closed at 84.06 on Friday.

The dollar index, which measures the value of the US dollar compared to six other major currencies, went up by 0.13%, reaching 103.02.

Analysts say the weakening of the rupee is caused by continuous foreign fund outflows from Indian markets and a recent 10% increase in crude oil prices. Foreign Institutional Investors (FIIs) sold around $6.4 billion worth of Indian stocks in October due to the global market’s cautious mood.

Crude oil prices have jumped because of Hurricane Milton, which affected oil production in the US, and ongoing tensions in the Middle East, particularly between Israel and Iran.

However, the Reserve Bank of India (RBI), with its high foreign exchange reserves, might intervene to stabilize the rupee. According to Amit Pabari, MD of CR Forex Advisors, the rupee could bounce back to below 84 if FII outflows ease. He predicts the rupee will trade in the range of 83.90 to 84.10 in the short term.

India’s forex reserves dropped by $3.709 billion to $701.176 billion as of October 4, according to RBI.

Meanwhile, Brent crude, the global oil benchmark, was trading 1.20% lower at $78.09 per barrel.

In the Indian stock market, the Sensex gained 461.97 points, or 0.57%, to reach 81,843.33 points. The Nifty also rose by 140.40 points, or 0.56%, to 25,104.65 points. FIIs were net sellers in the capital markets on Friday, selling shares worth ₹4,162.66 crore, according to stock exchange data.