Thu Feb 06 04:57:19 UTC 2025: **Rupee Plunges to Record Low Against Dollar Amidst Rate Cut Expectations**

**Mumbai, February 6, 2025** – The Indian rupee hit a record low of 87.57 against the US dollar in early trade today, depreciating by 14 paise. This sharp decline is attributed to market anticipation of an interest rate cut by the Reserve Bank of India (RBI) on February 7th, coupled with weak economic data and sustained foreign fund outflows.

The rupee opened weaker at 87.54 and further deteriorated to the all-time low of 87.57, following a 36 paise drop on Wednesday, closing at 87.43. Forex traders cited a dollar-buying spree by foreign banks and importers seeking to secure dollars before further depreciation as contributing factors. The weak performance is further exacerbated by the release of India’s services sector PMI data, which indicated the slowest expansion in over two years, falling to 56.5 in January from 59.3 in December.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, attributed the rupee’s slide to significant dollar buying by foreign banks and oil companies. He predicts the rupee will trade in the 87.30/60 range, closely monitoring the RBI’s upcoming policy decision.

The RBI’s Monetary Policy Committee (MPC) is currently in a three-day meeting, with its policy announcement scheduled for February 7th. The domestic equity market also reflected negative sentiment, with the BSE Sensex and Nifty indices declining by 0.20% and 0.23% respectively. Foreign institutional investors offloaded equities worth ₹1,682.83 crore on Wednesday. The global oil benchmark, Brent crude, saw a slight increase, trading at $74.71 per barrel.

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