Mumbai: For the first time in history, the Indian rupee has fallen to a record low against the US dollar, with the rupee crossing the 95 mark in the foreign exchange market on Monday.
The Reserve Bank of India had directed that all banks should limit the net opening position, NOP-INR, that can be held overnight to a maximum of $100 million.
As a result, the rupee rose by about 1 rupee 30 paise to 93.59 in the morning. While it rose in the morning, the rupee started to fall later.
By 3 pm, it was trading at Rs 95.13 per dollar. This is the first time that the rupee has fallen to $95 against the dollar.
The main reason for this huge decline is the continuous withdrawal of money from the Indian market by foreign portfolio investors (FPI Outflow). In addition, the rise in crude oil prices due to Middle East tensions has made India’s import costs more expensive. The ‘double effect’ of the depreciation of the rupee and the rise in import costs has put huge pressure on India’s foreign exchange market.