Indian Rupee Falls to 85 Per Dollar for the First Time
- Update Time : 09:38:32 am, Thursday, 19 December 2024
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The Indian rupee has continued to depreciate, hitting a historic low of 85.0675 against the US dollar on Thursday, December 19. This marks a further drop from the previous day’s rate of 84.9525. While it took only two months for the rupee to weaken from 84 to 85 per dollar, it required 14 months to move from 83 to 84 and about 10 months to drop from 82 to 83.
The decline is attributed to signals from India’s central bank about potential interest rate cuts next year, which have intensified pressure on the already strained currency due to weak capital inflows. The rupee’s decline has also coincided with the weakening of other Asian currencies, such as South Korea’s won, Malaysia’s ringgit, and Indonesia’s rupiah, which fell by 0.8% to 1.2%.
India’s economic growth during July-September reached its lowest point in seven quarters, while the trade deficit widened and capital flows weakened, further impacting the rupee’s value. Additionally, the strength of the US dollar, bolstered by expectations of Donald Trump’s economic policies and revised interest rate forecasts from the Federal Reserve, has exacerbated the rupee’s downward trajectory.
