Rupee Slides to 85.89 Against U.S. Dollar Amid Global Market Pressures

India’s currency began the trading session on a weaker note, falling 19 paise to settle at 85.89 against the U.S. dollar in early trade on Thursday. The decline reflects ongoing concerns about global economic trends, foreign capital outflows, and dollar strength.

Dollar Strength Weighs on Emerging Market Currencies

The U.S. dollar index remained firm amid renewed expectations of prolonged tight monetary policy by the Federal Reserve. This strength placed pressure on most emerging market currencies, including the Indian rupee, as investors turned risk-averse.

Domestic Factors Add to Currency Volatility

Rising crude oil prices and persistent foreign fund outflows also contributed to the rupee's depreciation. Market analysts believe that demand for dollars from importers and oil companies has further weighed on the domestic currency.

RBI Expected to Intervene Cautiously

The Reserve Bank of India (RBI) is closely monitoring currency movements and is expected to intervene selectively to curb excessive volatility. Traders expect some short-term support if the rupee continues to breach key resistance levels.

Market Outlook

Currency experts suggest the rupee may remain under pressure in the near term, especially with looming global uncertainties, geopolitical tensions, and concerns over inflation and growth. However, a positive domestic economic outlook and adequate forex reserves may help cushion the fall.