Widening trade deficit pushes Indian rupee to all-time low of 84.93

rupee

Indian rupee touched an all-time low in the early trade on December 17 after India's merchandise trade deficit widened to record high.

Indian rupee touched a record low of 84.93 against the US Dollar in early trade, as compared to 84.90 at open and 84.87 close on the previous trading session.

India's merchandise trade deficit widened to a record-high of $37.84 billion in November from $27.14 billion in the previous month due to a sharp rise in inbound shipments of gold, data released on December 16 showed.

On an annual basis, the trade deficit last month was much higher when compared to $21.31 in November 2023.

On a year-on-year basis, merchandise exports fell 4.9 percent year-on-year to a 25-month low of $32.11 billion in November, while imports shot up, rising 27.04 percent to $69.95 billion during the same period.

Gold imports jumped nearly 50 percent year-on-year in November 2024 to $49.08 billion after the government reduced the custom duty to 6 percent from 15 percent in July.

The pressure on the Indian rupee has sustained since last few months, due to foreign investors outflows, strong dollar, among others.

With today's fall, Indian rupee has depreciated 2.01 percent year-to-date, against the US dollar.

Last week, Moneycontrol has reported that going ahead, Indian rupee may touch 85 against the US dollar by the end of this month due to strong dollar and pressure on premiums in the forward market.