The Indian rupee slid to a record low on Tuesday after U.S.-Iranian strikes in the Gulf rattled markets, dimming hopes for a resolution and deepening concerns over risks confronting the oil-importing economy.
The currency weakened to 95.39 per dollar, down 0.3% on the day, eclipsing its previous all-time low of 95.33 hit on Thursday last week.
Oil-sensitive Asian peers such as the Indonesian rupiah and Philippine peso also weakened on Tuesday as the Gulf hostilities tested a fragile truce and kept investors on edge.
Analysts reckon that an elongated conflict in the Middle East, which keeps energy prices elevated, would widen India’s current account deficit, slow growth and stoke inflation.
The economic worries have reflected in foreign portfolio outflows from Indian assets. Overseas investors have net sold over $20 billion worth of Indian stocks between March and May so far.
m.economictimes.com