Rupee Slumps Below 96 per Dollar as Crude Prices and Foreign Fund Outflows Bite

The Indian rupee has depreciated by 16 paise to 96.13 against the US dollar in early trade on Tuesday, falling below the psychologically important 96 per dollar level.

This decline comes despite the Reserve Bank of India completing a large programme of bond sales this month with strong demand, which has helped keep the adjustment orderly.

The rupee's weakness is attributed to elevated crude oil prices and persistent foreign fund outflows, as well as rising US nominal and real yields that are drawing portfolio flows out of emerging markets, including India.