India rupee hits record low

• After hitting a record low of 77.81, the partially convertible rupee was trading at 77.79/80 per dollar.
• Rising crude prices tend to raise domestic inflation while expanding the country’s trade and current account deficits.
• Indian stocks fell for a fifth straight session as investors fretted about central banks’ aggressive policy tightening.

On Thursday, the Indian rupee fell to a new low against the US dollar, as the steady climb in global crude oil prices raised fears of a sustained rise in imported inflation, while unstable domestic stock markets also impacted.

After hitting a record low of 77.81, the partially convertible rupee was trading at 77.79/80 per dollar. On May 17, the previous low of 77.7975 was reached.

“There may be some dollar selling by the central bank,” a senior trader at a foreign bank said, “but they can only prevent day-to-day volatility, the rupee’s path is obviously lower.”

The central bank has often stated that it only intervenes in the currency market to stop severe volatility, not to target certain levels.

Traders predict that the rupee would weaken to 79/dollar by the end of fiscal year 2022/23, but that the decline will be hastened by high crude oil prices.

After China reported stronger-than-expected exports in May, oil prices held steady near 13-week highs on Thursday, though new Shanghai lockup limits limited gains.

Also Read

India considers curbing import of refrigerators

India is considering banning refrigerator imports to promote local manufacture, sources say....

India imports nearly all of its oil, and rising crude prices tend to raise domestic inflation while expanding the country’s trade and current account deficits.

Indian stocks fell for a fifth straight session as investors fretted that central banks’ aggressive policy tightening would impede global economic development.

On Wednesday, the RBI hiked its main repo rate by 50 basis points. find out more

Foreign funds have sold more than $23 billion in stocks so far in 2022, while selling $2.1 billion in debt.

According to a Reuters survey last week, bearish bets on Asian currencies reduced on hints that China’s economic suffering may ease with the relaxation of COVID-19 limits, but experts were still worried about further lockdowns and the direction of US monetary policy. find out more

“If levels around 77.80 start to be frequently violated, the rupee will depreciate even more.” This will make it easier to find targets.

Also Read

Indian cricketers smash batting record that stood for 129 years

Indian cricketers break the 129-year-old first-class record with nine half-centuries. Bengal declared...