The Indian rupee suffered its steepest single-day decline in the last six months on Friday, sinking 53 paise to hit an all-time intraday low of 85.80 against the US dollar. This sharp depreciation is primarily attributed to the relentless rise in US bond yields, which has intensified the greenback's appeal in the global market.

Despite positive movement in domestic equity markets, the rupee’s fall was largely due to the heavy selling by foreign institutional investors (FIIs). The decline in the valuation of equities in other Asian markets made Indian stocks appear less attractive, prompting a substantial exit of FIIs from Indian equities. This capital outflow further exacerbated the downward pressure on the rupee, according to analysts.