New Delhi, Dec. 3 -- The rupee (INR) dropped to a new low of 90.25 against the US dollar during Wednesday's intra-day session, falling by 29 paise from its previous close, influenced by foreign institutional investor outflows and ongoing dollar purchases by banks.

Swapnil Aggarwal, Director at VSRK Capital, explained that the US dollar has been gaining strength primarily due to elevated interest rates in the US, which has caused investors to favour dollar-denominated assets. Concurrently, domestic factors have intensified the situation as oil firms and importers ramped up their purchases of dollars, further influencing the rupee's movement.

Collectively, these elements have resulted in a supply-demand disparity in the foreign exchange m...