Indian rupee hits record low against US dollar amid rising oil prices, foreign fund outflows

The Indian rupee hit a record low against the US dollar on Friday, driven by concerns over increasing oil prices and the continuous outflow of foreign funds from India's stock markets. The rupee fell to 83.99 per dollar, surpassing its previous all-time low of 83.9850, which was recorded in mid-September. In the previous trading session, the rupee was at 83.9675.

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Just over two weeks ago, the rupee had seen a temporary rebound, reaching around 83.50 before this recent dip.

The decline in the currency comes amid rising crude oil prices, fueled by fears of supply disruptions in the Middle East. These concerns have been heightened by tensions, with reports suggesting that Israel is preparing to strike oil-producer Iran. Additionally, extreme weather in the US has contributed to the surge in oil prices. Hurricane Milton made landfall on Florida’s west coast, causing widespread damage, spawning tornadoes, and leading to increased fuel demand. A significant number of gas stations in Florida have run out of supplies due to the storm, further boosting demand.

Analysts suggest that oil prices are likely to remain elevated in the near term, adding additional pressure on the rupee as rising fuel costs typically increase India's import bill. The ongoing outflow of foreign capital from Indian markets has also contributed to the currency’s weakness.