Rupee slides to record low, crosses 96 vs USD for the first time
GS3Economy · S&T · Environment · Security· Growth, inflation & macro indicators· Prelims·
Why in news
The Indian Rupee hit a record low of 96.14 against the US Dollar due to persistent foreign capital outflows and weak net FDI inflows.
Background
The USD/INR pair reached a record low of 96.14 before recovering to 95.64. Brent crude prices rose by 3.20 percent to USD 109.20 per barrel. Foreign Institutional Investors (FIIs) purchased equities worth Rs 187.46 crore on Thursday.
Facts for Prelims
- FactUSD/INR record low: 96.14
- FactBrent crude price: USD 109.20 per barrel
- FactFII equity purchase: Rs 187.46 crore
- FactDollar index increase: 0.47 percent
For Mains
Q. Analyze the factors contributing to the depreciation of the Indian Rupee and its implications on India's external debt and inflation.
Dimensions to cover in your answer
- Capital flight: Impact of persistent foreign capital outflows on forex reserves
- Trade imbalance: Correlation between rising Brent crude prices and current account deficit
- Investment volatility: Influence of FII equity movements on domestic market stability
Keywords: Capital Outflow · Foreign Direct Investment · Current Account Deficit · Currency Depreciation · Forex Reserves
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