Indian Rupee Hits Fresh Low of 87.37 Against the US Dollar Amid Asian Market Slump

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The Indian rupee hit a record low of 87.37 against the US dollar on Wednesday, continuing a downward trend sparked by a slump in Asian equities. The rupee fell to 87.35 during afternoon trading, surpassing its previous record low of 87.28 set on Monday. This marked a nearly 0.3 percent drop for the day.

The decline in the rupee came amid a broader pullback in Asian equities, with investor sentiment dampened by escalating trade tensions between China and the United States. The drop in Chinese stocks after market reopening following the Lunar New Year holidays compounded the situation, contributing to market caution. The demand for dollars from importers further weighed on the rupee, though state-run banks stepped in with intermittent dollar sales to curb deeper losses.

In other Asian markets, Hong Kong equities saw a decline, and a wider Asian share index also reversed earlier gains. US equity futures also experienced a dip, with Alphabet Inc. (Google’s parent company) and Advanced Micro Devices Inc. reporting losses in after-hours trading. Meanwhile, Treasury yields increased, and the Japanese yen strengthened against the dollar.

While a weaker dollar helped most Asian currencies on Wednesday, the rupee underperformed as traders focused on expectations surrounding the Reserve Bank of India’s (RBI) upcoming policy rate cut. The dollar index fell by 0.3 percent to 107.7.

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Additionally, foreign portfolio outflows continued to pressure the rupee, with overseas investors having net sold $8 billion worth of Indian stocks and bonds in 2025 so far. Market participants are also closely watching the RBI’s Monetary Policy Committee (MPC) announcement, with the rate cut and persistent outflows adding to the rupee’s challenges.

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