Rupee Falls to Record Low

In December 2024, the Indian rupee hit a record low of 85.81 against the U.S. dollar, marking a 3% annual decline. This depreciation is due to reduced foreign investment, high inflation, and increased demand for dollars to fund imports like crude oil and gold. The Reserve Bank of India (RBI) has intervened using dollar reserves, which fell to 0 billion, to stabilize the rupee. However, a looser monetary policy and limited export growth have weakened the rupee's appeal. Analysts highlight the importance of continued RBI intervention and structural reforms to manage the rupee's value and economic stability.