Mumbai: The Indian rupee plummeted to an all-time low of 85.06 against the US dollar, shedding 12 paise in early trade, as a hawkish stance from the US Federal Reserve triggered a rally in the greenback.
At the interbank foreign exchange market, the rupee opened weak, breaching the critical 85.00 mark before falling further. On Christmas Day, the rupee had closed at a record low of 84.94.
Forex traders attributed the decline to the Federal Reserve’s revised projections for 2025, which signaled prolonged monetary tightening to combat inflation. Despite a 25 basis point rate cut, the Fed highlighted it could take another year or two to achieve its 2% inflation target, with further cuts projected in 2025 and 2026.
The dollar index, measuring the US currency’s performance against six major currencies, inched up 0.01% to 108.03, adding pressure on emerging market currencies like the rupee. Brent crude futures also slipped 0.42% to $73.08 per barrel, reflecting a stronger dollar.
Domestic equities followed suit, with the BSE Sensex dropping 910.95 points (1.14%) to 79,271.25, and Nifty declining 281.15 points (1.16%) to 23,917.70. Foreign Institutional Investors (FIIs) offloaded Rs 1,316.81 crore on Christmas, further dampening market sentiment.
