The Indian rupee plunged to a historic low against the U.S. dollar during the European trading session on Monday, influenced by a stronger dollar driven by geopolitical and economic factors.
U.S. President-elect Donald Trump’s warning of imposing “100 percent tariffs” on BRICS nations considering alternative reserve currencies intensified concerns, strengthening the dollar's appeal. This development overshadowed mixed signals from India’s domestic economic performance.
India’s manufacturing sector remained resilient in November, according to data from S&P Global. However, growth momentum slightly waned as inflationary pressures dampened order and production rates. The HSBC final Manufacturing Purchasing Managers’ Index (PMI) dropped to 56.5 in November, a decline from 57.5 in October, signaling a slower yet steady expansion. Any PMI reading above 50 indicates growth.
The rupee fell to a record low of 84.728 per dollar, slipping from its earlier peak of 84.564. Analysts caution that if the currency’s downward trajectory continues, it may test support levels near the 85.00 mark.
This situation underscores the challenges posed by external trade dynamics and domestic inflationary pressures, which could further strain the rupee in global markets.
Comments