Rupee falls 9 paise to hit all-time low of 85.24 against US dollar in early trade – Newz9

NEW DELHI: Indian rupee slid to a document low of 85.24 against the US dollar in early trade on Thursday, weighed down by rising US Treasury yields and a decline in most Asian currencies. The rupee, which had closed at 85.20 on Tuesday, opened decrease after a mid-week vacation in Indian monetary markets.
The 10-yr US Treasury yield climbed to its highest stage since late May, boosting the dollar index close to its year-to-date peak. The offshore Chinese yuan additionally weakened to 7.3070 per dollar, amplifying the regional foreign money stress.
A current Standard Chartered Bank report highlighted a number of headwinds probably to problem the rupee in the approaching yr. Key pressures embrace slowing overseas direct funding (FDI) inflows, weak manufacturing exports amid muted world demand, and a narrowing coverage fee differential with the US.
“Slowing FDI flows, weak manufacturing export growth, and narrowing policy rate differential with the US are likely to pressurize the INR,” the report famous. It tasks the rupee to depreciate modestly, reaching 85.5 per US dollar over the subsequent 12 months.
Despite these challenges, sure elements might lend assist to the rupee. India’s sturdy financial development, enticing actual yields, steady steadiness of funds bolstered by its inclusion in the worldwide bond index, softer commodity costs, and powerful foreign exchange reserves are all optimistic indicators.
However, these drivers will not be adequate to counter the downward pressures. (*9*) the report acknowledged.
The report additionally painted a positive image for Indian equities, underpinned by robust GDP development and company earnings which can be probably to outpace world friends. Factors similar to regular home investor inflows by means of systematic funding plans (SIPs), a possible resurgence of overseas investments, and anticipated US Federal Reserve fee cuts are anticipated to bolster the inventory market.
India’s financial development is forecast to recuperate from its present cyclical slowdown, supported by larger authorities capital expenditure, a revival in rural demand, improved city consumption, and broader coverage assist.
“We expect India’s economic growth to recover from a cyclical slowdown and stay ahead of its major peers in 2025,” the report added.
Inflation is anticipated to pattern decrease in 2025, pushed by declining meals costs owing to improved crop sowing and potential authorities interventions to handle provide considerations. Disinflationary results from earlier coverage tightening are additionally anticipated to ease inflationary pressures.
While the rupee faces close to-time period hurdles, India’s robust macroeconomic fundamentals and development potential are probably to form a resilient financial outlook for 2025. Despite exterior and home challenges, the broader trajectory suggests optimism for India’s monetary and financial future.