The Indian rupee is among Asia’s worst performing currencies this year, slipping to a fresh record low of over INR90 per US dollar on Wednesday.
Traders partly blamed delays in striking a trade deal with the United States.
Early in the year, trade negotiations between Washington DC and New Delhi had raised hopes that foreign capital would flow into the world’s fifth-largest economy. This optimism helped push the rupee to a nearly six-month high of 83.75 against the dollar in May.
However, setbacks in trade talks and weak corporate earnings have led overseas investors to sell more than $16 billion in Indian shares so far this year.
On Wednesday morning, the rupee weakened by as much as 0.35 percent to 90.19, a symbolic new low, according to Bloomberg data.
Dilip Parmar, an analyst at HDFC Securities, told a foreign media outlet that the fall in the rupee is primarily due to an imbalance of demand and supply, with foreign fund outflows and trade deal uncertainty adding pressure.
He added that another factor is the lack of a strong and consistent intervention from India’s central bank.
Analysts say the Reserve Bank of India has occasionally supported the rupee this year through aggressive dollar sales but appears recently to be allowing more currency flexibility.