Rupee Falls to a Record Low of 79.12 Against US Dollar; More Pain Ahead?

The Indian rupee plunged to a document low on Friday amid a strengthening greenback and a steady outflow of international funds from the native market and rising world crude oil costs. The home foreign money opened at 78.98 and tumbled to a contemporary all-time low of 79.12 (provisional) towards the US greenback. The foreign money has misplaced practically 6 per cent within the present monetary 12 months. The home unit was buying and selling at 79.09 a greenback, down 0.15 % from its earlier shut of 78.98 a greenback at 0920 hours on July 1.

Global oil value rose on Friday as OPEC+ stated that it could persist with its deliberate oil output hikes in August. Earlier, OPEC+ determined to extend output every month by 648,000 barrels per day (bpd) in July and August, up from a earlier plan so as to add 432,000 bpd per thirty days. Oil costs skyrocketed due to the tight provides and worries that the group has little capacity to extend output. A pointy bounce in crude oil costs stocked issues over an financial downturn.

The US greenback was on observe for its greatest week in a month. The greenback index , which measures the foreign money towards six counterparts, inched up 0.07 per cent in Asian buying and selling. The buck has gained 0.66 per cent amid a worry of a world slowdown. The buyers will keenly comply with the US ISM manufacturing information due later within the day.

“The Indian Rupee has been adversely affected mainly by the FIIs pulling out funds from the equity market, rising crude prices, the deteriorating trade balance and dollar strengthening,” analysts at Emkay Wealth Management stated in a notice. The internet outflow by international portfolio buyers (FPIs) from equities reached Rs 2.13 lakh crore till now in 2022, confirmed information.

Rupee Outlook: Will it Touch 80 per US Dollar Soon?

“Going forward, we might see the Rupee spot depreciating towards 80.5/81 levels by the year-end, owing to the widening of twin deficits,” stated Jigar Trivedi, analysis analyst, commodities & currencies elementary, Anand Rathi Shares & Stock Brokers.

“Rising crude oil prices might continue to weigh down on the net importer’s trade deficit, after rising to a record high deficit of $24.29 billion in May. Meanwhile, narrowing interest rate differentials amid hawkish central banks across the horizon with the US Federal Reserve ready to hike 75 bps in July might amplify the capital outflows, adding pressure on capital account. Though RBI might intervene in the forex markets to curb the losses, it’s unlikely to draw a line in the sand, as fundamentals remain weak,” stated Jigar Trivedi – Research Analyst, commodities & currencies elementary, Anand Rathi Shares & Stock Brokers.

“Hawkish stance of the global central banks continues to put pressure on the rupee. We expect the rupee to remain volatile in today’s session and could hold its key support level of 79.55,” stated Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

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