Mumbai

The Indian rupee weakened further on Tuesday, falling by 35 paise to close at a record low of 93.88 against the US dollar amid persistent global and domestic pressures.

The decline was largely driven by a stronger US dollar and rising crude oil prices, which dampened investor sentiment. Market participants also pointed to continued foreign fund outflows and uncertainty linked to the ongoing tensions in West Asia as key factors weighing on the currency.

At the interbank foreign exchange market, the rupee opened at 93.66 against the dollar and witnessed fluctuations throughout the trading session before settling at 93.88 (provisional). This comes after the currency briefly crossed the 94-mark for the first time in the previous session before ending flat.

Analysts noted that sustained foreign portfolio investor (FPI) outflows have been exerting pressure on the rupee, while the strengthening dollar has kept emerging market currencies under strain. The rupee has depreciated by around 4.5 per cent so far this month.

Geopolitical developments also contributed to volatility. Comments by Donald Trump regarding talks with Iran and deadlines linked to the Strait of Hormuz added to market uncertainty, especially as conflicting signals emerged from Tehran.

Meanwhile, the dollar index, which measures the US currency against a basket of major global currencies, edged higher during the day. Global oil benchmark Brent crude also remained elevated, adding to pressure on import-dependent economies like India.

Despite currency weakness, domestic equity markets showed resilience. The BSE Sensex surged over 1,300 points to close above 74,000, while the NSE Nifty also ended higher, reflecting strong investor interest in equities.

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Data showed that foreign institutional investors offloaded equities worth over Rs 10,000 crore in the previous session, further contributing to pressure on the rupee.