Indian Rupee Dips Near Record Low Amid Stronger Dollar

The Indian rupee dipped to approximately 96.4 per dollar, nearing an all-time low after a period of stability. The decline was driven by a stronger US dollar, rising US Treasury yields, and higher oil prices, all of which boosted demand for the dollar.

The dollar index surged above 102, gaining support from the euro's weakness due to political and fiscal uncertainties in the eurozone. Meanwhile, both 10-year and 30-year US Treasury yields hit their highest levels in 24 years.

Foreign investors pulled out equity from India, and the persistent need for dollar hedges by importers added further pressure on the rupee. Indian companies had hedged a record $77 billion in September, marking an increase of over 80% year-on-year.

The Reserve Bank of India stepped in to sell dollars, aiming to ease the rupee's decline. However, traders anticipate that the central bank will focus on smoothing the fall rather than defending a specific exchange rate level.