Rupee's Downward Spiral Continues, Currency Closes at All-Time Low of 95.25 Against Dollar

New Delhi: The rupee’s downward spiral continued, with the currency farther falling 2 paise to close at an all-time low of 95.25 (provisional) against the US dollar on Tuesday (May 5), reported Press Trust of India.

The rupee, which was consistently falling in recent months, is further damaged in the wake of the West Asia crisis, with Forex traders saying that Brent oil, which is hovering near USD 110 per barrel, is maintaining pressure on oil-importing economies like India.

Other factors such as unabated foreign capital outflows amid rising geopolitical uncertainties have  also further dented investor sentiments.

On Tuesday, at the interbank foreign exchange market, the rupee opened at 95.30 against the US dollar, then lost ground and touched an all-time low of 95.44 in intra-day trade.

Later, it finally settled for the day at a fresh record low of 95.25 (provisional), registering a fall of 2 paise over its previous close, reported PTI. Earlier on Monday (May 4), the rupee had declined 39 paise to close at an all-time low of 95.23 against the US dollar.

Meanwhile, according to an industry survey report released by S&P Global on Monday, manufacturing activities remained sluggish for the second consecutive month in April, after being affected by muted demands and elevated input costs, reported Deccan Herald.

The surge in input costs was driven by higher prices for aluminium, chemicals, electrical components, fuel, leather, petroleum products and rubber. The surveyed companies attributed the hikes to the West Asia conflict. The overall rate of inflation rose to its highest since August 2022.

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