FX.co ★ Indian Rupee Hits Fresh All-Time Low

The Indian rupee depreciated to approximately 89.3 against the USD, marking a new record low. This decline is attributed to the economic impact of significant US tariffs. Recent data indicates India's economic activity slowed in November, evidenced by a deceleration in manufacturing growth to its lowest level since May and a moderation in service sector expansion. This follows an unexpectedly large trade deficit recorded in October, with a notable drop in exports to the US, India’s largest trading partner, due to the 50% tariffs imposed by President Trump. On the monetary policy front, despite inflation reaching unprecedented lows, consensus on a rate cut in December remains elusive as core inflation persists at high levels. Meanwhile, the Reserve Bank of India's consistent interventions have provided some stability to the rupee in recent months, and the reduction in the goods and services tax in September has bolstered domestic demand. The focus now shifts to the forthcoming GDP figures next week and the potential for a trade agreement between the US and India.