The Indian rupee dropped to a historic low of Rs 94.24 against the US dollar on Friday, sparking sharp declines in Sensex and Nifty.
Oil Prices and FII Outflows Add Pressure
The rupee opened at ₹94.18 and weakened further to ₹94.29 in early trade. Elevated crude oil prices and a stronger dollar intensified stress on India’s import-dependent economy. Brent crude surged past USD 105.75 per barrel before settling near USD 107.1 in futures trade. The US dollar index climbed to 99.67, adding strength to the greenback.
Forex analysts highlighted heavy foreign institutional investor (FII) outflows as another factor. On Wednesday, FIIs sold equities worth ₹1,805.37 crore, deepening pressure on domestic markets.
Sensex and Nifty Plunge
The Sensex fell 926.92 points to 74,346.53, while the Nifty dropped 280.95 points to 23,025.50 in early trade. Investor sentiment remained cautious amid global uncertainties, particularly geopolitical tensions in West Asia.
Inflation Concerns Loom
Economists warned that higher crude prices could push fuel costs upward, raising inflation risks. A weaker rupee makes imports costlier, affecting businesses reliant on overseas purchases. Travellers and companies with foreign currency exposure also face increased expenses.
The rupee’s record low reflects the combined impact of global oil prices, dollar strength, and foreign investor exits. Analysts expect volatility to continue until geopolitical tensions ease and crude prices stabilise.
