The rupee reached a new low against the dollar while the sensex hit new all-time highs. This anomaly occurred as the rupee breached 83.39 for the first time on the day the sensex closed at a new high. The surge in domestic investors and the decoupling of the rupee-dollar from other currency pairs have contributed to this phenomenon. Indian corporates’ robust earnings and inclusion in emerging market bond indices by JP Morgan have also played a role. RBI has used its reserves to support the currency and protect the economy from a higher import bill.
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