The Indian rupee is facing the onslaught of the US dollar in the currency market this week. INR fell to a new low of 83.73 against the USD on Friday’s closing bell raising fears of a further decline. The record slip sent shockwaves across the Indian export and import sector as trade and commodities will turn costly.
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The strengthening of the US dollar is making local Asian currencies worried that their economies could face severe challenges. The DXY index, which tracks the performance of the USD shows the currency above the 104.30 mark. If the Indian rupee declines further, the cost of daily essentials will rise across the country.
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Currency: Indian Rupee Falls To New Lows Against the US Dollar
While the Indian rupee fell to 83.73 on Friday, it briefly surged on Monday’s opening bell rising to 83.66. The rise might seem temporary as the US dollar is attracting heavy bullish sentiments. Analysts have been cautious that the INR dipping below 83.80 could lead the way for a decline to 84 levels.
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In addition, foreign institutional investors (FII) exit from the Indian stock market is also making the Indian rupee weaker. Both the Sensex and the Nifty 50 index are ending the day’s trade in the red for nearly a week.
The Indian rupee has been under pressure for nearly two months and the US dollar could find a breakthrough in price. However, if the INR falls below 83.80, both the currency sector and the Indian stock market could decline.
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It will “be a matter of concern till it is holding above 83.80,” said Sajal Gupta, Head of Forex at Nuvama Institutional. A fall to 83.80 could open the pathway for the rupee to touch a low of 84. There are higher chances of that happening by the end of 2024.
