Daijiworld Media Network – New Delhi

New Delhi, Dec 4: The Indian rupee plunged to a fresh record low of Rs 90.25 against the US dollar on December 3, dropping 29 paise intra-day, as the currency came under pressure from large foreign institutional investor (FII) outflows and sustained dollar purchases by banks.

The currency opened at Rs 89.96 but slid to an all-time intra-day low of Rs 90.25. On December 2, the rupee had closed at a record Rs 89.96, after a 43-paise fall prompted by speculator short-covering and a surge in importer demand for dollars.

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Traders attribute the steep fall to a combination of factors including weakening domestic equity markets, lack of clarity over an India–US trade deal, and strong demand for hard currency. The ongoing meeting of the Reserve Bank of India’s Monetary Policy Committee (MPC), which will announce its rate decision on December 5 — just ahead of the Federal Reserve’s US rate decision on December 10 — is also being closely watched. Analysts warn that a rate cut by the RBI could trigger further depreciation of the rupee.

Meanwhile, global indicators provided little relief: the dollar index remained firm and Brent crude — a major import for India — continued to trade near $62.43 per barrel, limiting support for the rupee.

Domestic equity markets mirrored the currency’s slide, with the benchmark Sensex dropping 165.35 points to 84,972.92 in early trade, and the Nifty 50 falling 77.85 points to 25,954.35. According to exchange data, FIIs sold equities worth Rs 3,642.30 crore on Tuesday alone, exerting further pressure on market sentiment and the rupee.