Indian Rupee Falls to Record Low: Strong Dollar and Geopolitical Tensions Weigh

The Indian rupee reached a new low on Friday as a resurgent US dollar and ongoing capital outflows put pressure on the currency. Simultaneously, heightened geopolitical risks dampened investors' risk appetite. In early trading hours, the rupee fell to a record low of 84.4975, surpassing the previous low of 84.4925 from Thursday. It is highly likely that the Reserve Bank of India intervened to limit the rupee's losses. Traders reported significant sell orders from state banks around the 84.50 mark, carried out on behalf of the central bank. Meanwhile, the dollar index rose to a 13-month high on Thursday and eased slightly in Asian trading on Friday, while most regional currencies registered moderate gains. The pressure on the local currency was further exacerbated by the withdrawal of over 4 billion dollars in foreign investments from Indian stocks and bonds in November.