Indian Rupee hits record low of Rs 84.09 against US dollar due to oil price surge and foreign fund outflow
The Indian rupee hit a record low of Rs 84.09 against one US dollar on Friday due to concerns about rising oil prices and persistent foreign fund outflows from the country’s stock markets. The rupee had in the morning weakened to 83.99 per dollar, surpassing its previous all-time low of 83.9850. Now it has crossed the 84 mark and is at 84.09 as of October 11, 2024, 3.53 PM.
As per a Reuters report, The Indian central bank was likely selling US dollars to support the rupee, when it approached the record low. The rupee had rebounded to around 83.50 just over two weeks ago.
Why Rupees Depreciated? Impact on Stock Market
India's reliance on crude oil imports affects the rupee's value. Recent crude oil price increases are secondarily driven by concerns about potential supply disruptions in the Middle East due to a potential escalation between Iran and Israel.
Primarily the spikes in fuel demand are due to Hurrican Milton a storm that struck US' Florida, that have caused rupee fluctuation. Brent crude oil prices increased by over 3.5 per cent yesterday, and now is quoting 78.79 USD per barrel, a decrease of 0.61 from the previous day.
In stock markets, a weaker rupee can benefit export-oriented sectors like IT, pharmaceuticals, and textiles by making their goods cheaper for foreign buyers. Conversely, industries heavily reliant on imports, such as oil and gas, food and beverages, and capital-intensive sectors, face increased costs when the rupee weakens. It can also exacerbate the risk of more foreign investors withdrawing their investments, as a significant FII selloff is ongoing.