Re Nosedives Below 85/$ For First Time

Mumbai: The rupee dropped 14 paise and breached the crucial 85 level to close at an all-time low of 85.08 (provisional) against the US dollar on Thursday, as a Hawkish stance from the US Federal Reserve sparked a broad dollar rally.

Forex traders said the Indian rupee breached the 85-mark for the first time and fell to a new record low on Thursday, as the US Federal Reserve adjusted its projections for 2025, signalling a more cautious monetary policy stance, pressuring emerging market currencies, including the Indian rupee. The US Federal Reserve cut interest rates by 25-bps to 4.5 per cent, in line with estimates.

However, it signalled only two rate cuts in 2025 from its previous expectations of four rate cuts. At the interbank foreign exchange, the rupee opened on a weak note and breached the crucial 85.00 level against the greenback. It fell further to an all-time low of 85.08 against the American currency, registering a fall of 14 paise over its previous close, as dollar demand from importers, foreign fund outflows and a muted trend in domestic equities further dented investor sentiments. On Wednesday, the rupee dropped 3 paise to close at an all-time low of 84.94 against the US dollar.

“We expect the rupee to trade with a negative bias on global equities following a hawkish Fed and a strong dollar,” said Anuj Choudhary.