The Indian Rupee experienced a sharp fall this Tuesday, depreciating by 45 paise to hit an all-time low of 88.73 against the U.S. dollar. This unsettling development comes at a time when the U.S. dollar itself is showing signs of depreciation, influenced by a somewhat inconsistent and staggered U.S. foreign policy approach.
According to financial experts, the primary catalyst behind this downward spiral is the persistent lack of clarity surrounding U.S. tariffs. This uncertainty continues to create an environment of unease and speculation in the global markets.
Adding to the currency’s vulnerability is the Reserve Bank of India’s (RBI) decision to refrain from any substantial intervention. Analysts interpret this as the RBI potentially believing that forcefully stopping the depreciation at this moment may not be necessary. However, this stance could inadvertently open the door for even greater depreciation in the near future.
Following two consecutive days of declines triggered by broader global economic shifts, the Rupee’s latest slump now positions it as the weakest performing currency among its Asian counterparts.