As global volatility continues to weigh on Indian currency markets, the Indian rupee has hit a new low against the US dollar, breaching the 94 mark for the first time.
The local currency opened at 94.15 on Friday and is currently trading near 94.27 as compared to Wednesday's close of 93.97.
This comes on the back of the ongoing conflict in the Middle East, with the rupee having depreciated as much as 3.6% since the start of the year.
However, G Chokkalingam, Founder & MD, Equinomics Research, believes the rupee could return to 90 levels once the war is over.
"Till the Iran war ends, it will remain weak. Once the war ends, it is likely to bounce back to at least 90 against the US Dollar," he said.
Meanwhile, Harshal Dasani, Business Head, INVAsset PMS, believes RBI action could become a key focus point if the rupee continues to depreciate and falls below the 95 mark against the US dollar.
"If 95 is breached decisively, the focus will quickly shift to whether the RBI treats it as a volatility event or as a level that needs active defence," he said.
"The bigger risk is not the number itself, but the message behind it: that oil, geopolitics and dollar strength are starting to reinforce each other. In that environment, sectors dependent on imported inputs, fuel, or external borrowing would remain under pressure, while exporters and select defensives could relatively outperform.
"The currency market would then become a key transmission channel for inflation and earnings risk, making rupee stability just as important as equity market stability," he added.
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