The Indian rupee extended the plunge from the 19-month low on Thursday and fell to its all-time low value at the foreign exchange market against US dollar breaching the 69 per USD level for the first time in history.
The Indian rupee extended the plunge from the 19-month low on Thursday and fell to its all-time low value at the foreign exchange market against US dollar breaching the 69 per USD level for the first time in history. The rupee to US dollar value today hit the lowest in history at the interbank foreign exchange market and the weaker opening in the domestic equity markets also added to the down surge. Within 20 minutes of opening up of forex market in India, the rupee crashed as much as 49 paise and broke the 69 per USD level for the first time in history.
The rupee quickly extended the losses in the morning deals after opening on a weaker note. The Indian rupee lost a whopping 49 paise to hit an all-time low of 69.10 apiece US dollar. The sudden collapse in the rupee value against US dollar is mostly due to the rising crude oil prices coupled with certain other factors such as trade war tensions between US and China, widening of the fiscal deficit and inflationary pressure. According to experts, a sustained demand of US dollar in the forex market from banks and importers such as oil marketers has weighed on the rupee value.
Further, FPIs (Foreign Portfolio Investors) being on a continuous sell-off mode has also been adding to the rupee depreciation. The Reserve Bank of India (RBI) on Wednesday has fixed a reference rate of 68.5246 and 79.8654 against US dollar and euro, respectively. Earlier in 2016, the rupee touched a historic low of 68.86 (24 November 2016) and a lifetime closing low of 68.80 on 28 August 2013. Crude oil prices have rebounded after the US asked its allies to end all imports of Iranian oil by a November deadline.
A reversal in crude oil prices and ballooning of fiscal deficit have been hurting the domestic currency (rupee) over the last month. In the current year 2018, the rupee has emerged as the worst performing currency in Asia.
Meanwhile, US WTI crude oil prices dipped away from three-and-a-half year highs on Thursday amid high output from Russia, the United States and Saudi Arabia, although unplanned supply disruptions elsewhere and record demand stemmed a bigger decline, Reuters said in a report. With the latest data available, Brent crude oil traded down 0.09% at $77.55 per barrel and US WTI crude oil traded 0.26% lower $72.57 per barrel today.