iNDICA NEWS BUREAU-
The Indian rupee hit a record low of 79.74 for the fourth straight session Thursday against the United States dollar, which, in turn, continued its rise against other major currencies.
Experts said the rupee’s slide was also due to foreign institutional investors (FIIs) continuing to sell Indian equities, pressuring the Indian currency further. The National Stock Exchange Index (Nifty) fell 28 points (0.18%%) to 15,938 at the end of the session after rising in early trade. The bellwether Bombay Stock Exchange Index (BSE Sensex) also fell 0.18% or 98 points to close at 53,416 points.
The rupee today edged closer to ₹80 per dollar, while the dollar’s rise was mostly driven by expectations of the U.S. Federal Reserve’s monetary policy, with interest likely to go up again as fears of a recession grow.
According to ICICI Securities, “The rupee is expected to depreciate today amid strong dollar and risk aversion in global markets. Market sentiments are hurt as red hot inflation in the US stoked bets that the US Fed may have to raise interest rates much more than expected, even 100 bps. Additionally, consistent FII outflows and concerns on looming recession may hurt rupee. US$INR (July) is expected to trade in a range of 79.50-80.00.”
According to Bloomberg, elevated commodity prices in India have stoked inflation, boosting the subsidy bill. “The options market is pricing in a 64% chance that the rupee will weaken to 82 per dollar in the next six months from around 79.6 now.”
The weakening rupee could impact India’s short-term oil import bill as well. India imports more than two-thirds of its oil and high global crude prices have threatened to push up the country’s trade and current account deficits even further, hurting the Indian currency further.
Indian rupee falls to an all-time low against US dollar
