Rupee opens at new low for second consecutive session
The rupee opened at a new record low for the second straight session on Monday after breaching the 82-per-dollar mark for the first time on Friday, hurt crude oil prices near $100 a barrel and strong US jobs data. gave a signal. Aggressive rate growth path.
Bloomberg showed that the rupee was last turning around at 82.6650 per dollar after opening at a record low of 82.6725 and hit its weakest level at 82.6950 during early trade on Monday as against Friday’s 82.33.
The rupee has lost over 10 per cent of its value this year and hit its previous all-time low of 82.4275 against the dollar on Friday, despite the Reserve Bank of India continuing to sell off foreign exchange reserves to support the rupee.
In recent sessions, the rupee has repeatedly hit record lows on rising oil prices and concerns about Treasury yields, corporate outflows and demand for the dollar.
With the RBI spending nearly $100 billion out of the country’s foreign exchange reserves since Russia invaded Ukraine in late February, the central bank has been unable to contain the rupee’s fall, unlike previous examples.
For almost 50 days, RBI had earlier managed to keep the rupee from breaking 80 per dollar.
“The double whammy of high US rates and high crude oil prices is to pull the rupee back,” said IFA Global Research Academy.
“While the RBI was able to successfully protect the rupee through the last round of simultaneous stress on the current and capital account by spending its reserves, things are likely to be different this time around.”
Oil heaved a sigh of relief and lowered to its 5-week high on Monday, but Brent crude edged closer to $100 a barrel.
Analysts have raised their forecasts for oil prices and now expect Brent to surpass $100 a barrel in the coming months.
Given that India imports more than 80 per cent of its oil needs, a rise in crude oil prices will add to the country’s inflation problems and current account deficit (CAD).
