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The Indian rupee dropped by 71 paise during intraday trade to hit the all-time record low of 83 against the United States dollar on Wednesday.
It followed the trend of the US dollar strengthening its position against most major currencies including the pound in the United Kingdom.
While the previous all-time low was 82.63, the rupee fell rapidly after the trade started but later in the day, it was able to recover slightly to stabilise somewhere around 82.20-82.40.
According to Financial Times, experts were taken by surprise following the sudden drop and the trading on Thursday will be crucial to determine the future trend of the Indian rupee.
The impact of the rupee was also felt in the Indian stock market as the Sensex and Nifty 50 – two major indicators – fell considerably and closed the market with substantial losses on Wednesday.
The main reasons behind this sudden drop in the rupee’s value are the mounting recession fears brought about the ongoing Ukraine-Russia war. Currencies like the Euro, Pound and the Yen have all lost their value in the last month and Reuters reported that the rupee can fall below the 83-mark.
Earlier in the day, the Office for National Statistics in the United Kingdom said that the inflation was at its all-time high since 1982. The index rose from 9.9 per cent in September to 10.1 per cent.
On the other hand, the Japanese Yen is also experiencing a 32-year low against the US dollar. The USD is boosted by the measures taken by the US Federal Reserve and that has directly affected the other currencies.
