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Rupee closes at all-time low vs US dollar
Importers! Hedge your U S $ Commitments at least now, if not done already !
The rupee fell to as much as 79.37 vs US dollar : Rupee falls 42 paise to close at all-time low of 79.37 against US dollar. May touch Rs 82 , say analysts.While exporters are rejoicing over the weakening of rupee vs USD, the importers have huge commitments and with FIIs selling, adding fuel to the fire in terms of demand for USD.
Indian rupee today fell 42 paise to close at all-time low of 79.37 against US dollar. At day’s low, rupee fell to 79.38 vs US dollar. Broad strength in US dollar and unrelenting foreign fund outflows weighed on the Indian currency. Indian stock market benchmark Sensex today ended 100 points lower, reversing earlier gains.
The dollar index, which measures the greenback’s strength against a basket of six currencies, was up 1% to 105.88%. Brent crude futures, the global oil benchmark, fell 1.10 per cent to $112.25 per barrel. Foreign institutional investors remained net sellers in the capital market on Monday as they offloaded shares worth ₹2,149.56 crore, as per exchange data.
“Rupee scaled to fresh new lows below 79.35 falling by more than 0.50% amid strong sell off from higher levels in capital markets indicting FII’s still fearful on any rise in equities. Rupee felt the heat with dollar index sharp surge towards $106 rising 1% compared to last close. As risk sentiment on inflationary pressures continues globally. Rupee range can be seen between 79.05-79.55,” said analyst.Data late on Monday showed India’s June trade deficit widened to a record high of $25.63 billion, following a rise in crude oil and coal imports, from $9.61 billion a year earlier. Analysts and economists are expecting the country’s current account deficit to widen to around 3.2% of the GDP in fiscal year 2023 compared with 1.2% in 2022.
The US dollar is up over 6.7% against rupee so far this year. So to limit the decline in the Indian rupee, the government has imposed a windfall tax on domestic crude producers, imposed new levies on the export of petrol, diesel, and aviation turbine fuel (ATF), and hiked import duty on gold.
“The Indian rupee is reeling under pressure on the back of a rise in the dollar index towards a multi-decade peak, incessant portfolio outflows, soaring crude oil prices, and a rising interest rate regime. Besides, the rise in crude prices is leading to a lot of concerns about widening CAD, which is weighing on the rupee-dollar exchange rate.,” said another.
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