Indian Rupee Reaches New Low Against the Dollar

The Indian rupee has hit a record low, closing at 85.77 against the dollar on Friday, marking its ninth consecutive week of losses. This decline is largely due to the weakening of the Chinese yuan and the strengthening of the dollar.

Forex Reserves at an Eight-Month Low

India's foreign exchange reserves have fallen for the fourth consecutive week, reaching an eight-month low of $640.3 billion as of December 27. Despite a $541 million increase in gold reserves, foreign currency assets have dropped by $4.6 billion to $551.9 billion.

Market Reactions and Future Outlook

The rupee depreciated by 0.2% over the week, with the dollar index surpassing 109. Traders are closely monitoring US economic data, including the upcoming jobs report and inflation data, which could further influence the rupee's value. Analysts predict the rupee could touch 86/$ in the short term, as corporates continue to buy the dollar on dips and the RBI ensures sufficient supply of the greenback at higher levels.