Rupee Falls to Lifetime Low, Experts Cite Uncertainty After Imposition of US Tariffs as Major Reason
The Wire Staff
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New Delhi: The Indian rupee (INR), which has been on a downward spiral in recent months, touched its lifetime low on Friday (November 21) after depreciating to of 89.6650 against the US Dollar. It had previously closed at of 88.6850. The latest fall of 98 paise was owing to negative cues from global and domestic equity markets because of to trade-related concerns, said forex analysts who highlighted the fact that this was the biggest single day fall of the INR in over 3 months, reported The Hindu.
“Global risk-off sentiment has spilled into currency markets after a sharp overnight sell-off in cryptocurrencies and AI-linked technology stocks. The sudden unwinding of risk trades is weighing on emerging-market currencies, including the Indian Rupee,” Anindya Banerjee, head of research – currency, commodity and interest rate derivatives told the newspaper.
“Adding to the pressure is the lingering uncertainty around the proposed India–US trade deal, which markets had hoped would offer clarity on the bilateral economic outlook. With no firm timelines emerging, sentiment remains fragile,” he added.
“USD/INR broke decisively above 89.00, a level many importers and dealers believed the RBI would defend. Once this perception failed, aggressive short-covering kicked in across onshore and offshore markets, triggering stops and amplifying the upside move,” said Banerjee.
He added that in the near term, factors such as risk-off flows, a firmer U.S. Dollar Index, and uncertainty surrounding the trade-deal with the US keeps the bias upward, with the pair potentially testing the 90.00 mark.
The rupee’s fall on Friday was the biggest single day percentage fall after May 8, 2025, making it the worst performer among its Asian peers, said Dilip Parmar, research analyst, HDFC Securities.
“The sudden surge in the USDINR pair was largely attributed to short covering, delay in U.S. India trade deal and the apparent absence of intervention from the central bank,” Parmar added.
"An early trade deal is important for a recovery in export order momentum, which remains below Jan-Jul levels as per PMI data," said economists at Citi in a note, reported Reuters.
Ever since the imposition of the 50% tariffs on Indian imports which came into effect in late August, rupee has continuously struggled for three months, the Reuters report added.
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