Rupee Hits Record Low for Sixth Straight Day

The Indian rupee continued its downward spiral, reaching an all-time low for the sixth consecutive trading session on Tuesday. The currency weakened to 85.21 against the US dollar, surpassing its previous record low of 85.12 set on Monday. The rupee eventually closed at 85.20, marking a 0.1% decline for the day.

Several factors contributed to the rupee's persistent decline, including a rise in US bond yields, which strengthened the dollar, and strong demand for the greenback from importers. Additionally, the Reserve Bank of India's (RBI) intervention through dollar sales helped to limit the rupee's losses, although traders noted that the RBI's approach seems to be focused on curbing volatility rather than defending specific levels. This strategy suggests that steady rupee depreciation may continue in the near future.

Other factors affecting the rupee this quarter include tepid capital flows, a widening trade deficit, and concerns about slowing economic growth.