New Delhi, Dec 3 (UNI) The Indian rupee extended its sharp decline on Wednesday, breaching Rs 90 per dollar mark for the first time and touching a fresh lifetime low in early trade.
On Wednesday, the currency opened weaker and slipped continuously as strong demand for dollars and persistent foreign fund outflows continued to dominate the market.
The slide reflects pressure building over the past week, with overseas investors steadily pulling money out of both equities and debt.
The firm U.S. dollar, combined with global risk aversion, has kept emerging market currencies under stress, pushing the rupee to its weakest level on record.
Importers, particularly in sectors dependent on crude and components also increased dollar buying, adding to Wednesday’s weakness.
The currency fall weighed on domestic markets as well, with indices opening lower amid concerns that a weaker rupee will raise input costs for many industries.
Companies that rely on imported materials, especially in automobiles, electronics and manufacturing are expected to face higher expenses as the exchange rate pushes up dollar-denominated costs.
Sectors linked to global supply chains may see the immediate impact.
Auto and component makers could encounter cost pressure if the rupee stays below 90 for long, as a large share of their inputs are linked to global currency movements.
Export-oriented companies may gain some pricing advantage, but the benefit could be limited if imported inputs form a significant portion of their production.
A weaker rupee also has wider implications for households. Imported goods-from crude oil to electronics may become costlier, increasing inflationary pressure.
Expenses for overseas travel, foreign education and international payments will also rise, making Wednesday’s fall immediately visible to consumers.
The path ahead for the rupee will depend on the movement of global currencies, the pace of foreign inflows, and developments in international trade conditions.
For now, the breach of the Rs 90 mark signals a challenging phase for the economy, with markets, businesses and consumers preparing for a period of elevated currency volatility.
