The Indian rupee weakened by 10 paise to a record low of 85.12 against the US dollar on Monday, marking a significant decline in its value. The domestic currency opened at 84.85, according to Bloomberg data, and had closed at 85.02 on Friday. This continued depreciation comes amid rising global pressures, including an increase in Brent crude prices, which rose 0.41% to $73.24 per barrel. The rise in crude prices was partly driven by easing concerns about a potential US government shutdown and expectations of continued policy easing by the US Federal Reserve.

The US dollar index gained 0.12% to 85.1187, reflecting the ongoing upward momentum of the greenback. Exporters are reportedly holding off on selling dollars, anticipating a stop loss at 84.90, while importers are advised to take advantage of any dips in the rupee to meet their dollar needs.

Amit Pabari, managing director at CR Forex Advisors, explained that the US Federal Reserve's recent signals about limiting rate cuts in 2025 have kept the dollar index elevated, putting pressure on emerging market currencies, including the rupee. Domestically, the rupee faces further strain as foreign portfolio investors continue to sell equities, adding to the currency's weakness. However, the upcoming Sensex reshuffle, with Zomato’s inclusion expected to bring in net inflows of $260 million, could provide temporary relief to the rupee.

India's forex reserves have also fallen to a six-month low, as the Reserve Bank of India has intervened to manage the sharp depreciation of the rupee. The dollar-rupee pair is expected to trade within a range of 84.90 to 85.10 in the near term.