The Indian rupee hit 80 per dollar on Tuesday (July 19), for the first time ever, yet another record low, as international investors kept offloading the Indian stocks. The rupee fell to 80.06 against the dollar. The currency has been impacted by the nation’s record high foreign equity outflows of about $30 billion so far this year, now worrying about a widening current account deficit in the face of high oil and commodities prices. The Indian policymakers have taken various steps to stop the rupee’s slide such as from intervention to hiking import taxes on gold, Bloomberg reported.
As per Governor Shaktikanta Das, the Indian central bank is intervening in all market segments to reduce the risk and support a currency’s orderly appreciation or depreciation. However, the Indian rupee touched a record low for the seventh straight session on Tuesday, Reuters reported.
The RBI has been using its $600 billion in foreign exchange reserves to defend the Indian rupee. Additionally, the monetary authorities enabled trade to be settled in rupees and announced initiatives to increase the foreign currency inflows into the nation.
However, Tuesday saw a decline in oil prices as the dollar fueled purchasing demand. As the West sanctions in Russia, the supplies have disrupted trade flows to refiners and have been a thorn on the side of the oil markets. At the same time, there have been growing concerns that the central bank’s efforts to tame surging inflation may lead to recession, which would reduce future fuel demand. Despite the decline in oil prices, several banks were already charging 80 rupees for every dollar in the exchange rate, the State Bank of India said.
However, it is expected that the rupee might fall to 82 to the dollar by September this year, according to strategists at Nomura holdings Inc. and Morgan Stanley, Bloomberg reported.
The rupee has been reported to reach fresh record lows practically every other day in recent months, and traders believe this trend will continue.
(With inputs from agencies)
WATCH WION LIVE HERE
You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.