Rupee At All-Time Low Against Dollar
Rupee Against Dollar: When will the fall in rupee stop? 13 paise breaks to a new low against the dollar
The slowdown in domestic equity markets and frequent foreign fund outflows weighed on investor sentiment. Due to this, the rupee fell by 13 paise to close at an all-time low of 78.17 (provisional) against the US dollar on Wednesday. The indian currency opened at 77.99 at the interbank forex market and finally closed at its all-time low of 78.17, down 13 paise from its previous close of 78.04.
Gaurang Somaiya, Forex and Bullion Analyst at Motilal oswal Financial services said the US central bank is likely to hike interest rates by up to 50 bps. Hawkish remarks may support the dollar at lower levels. Major currencies remained under pressure following broad gains in the dollar. Meanwhile, benchmark Brent crude futures fell 1.07 percent to $119.87 per barrel.
Foreign investors continue to sell Looking at the domestic stock market, the BSE Sensex closed 152.18 points or 0.29 percent lower at 52,541.39, while the broader NSE Nifty closed 39.95 points or 0.25 percent lower at 15,692.15. Foreign institutional investors continued their sell-off, selling shares worth a net Rs 4,502.25 crore on tuesday, according to stock exchange data.
Significantly, on Monday, the first trading day of the week, there was a big fall in the indian currency rupee. As soon as the market started, it had broken 28 paise against the dollar and reached the level of 78 for the first time. The trend of decline continued on tuesday as well, while on wednesday this decline increased even more. Amid the continuing fall in the rupee, a report quoted experts as saying that the rupee may hit an all-time low of 81 against the dollar in the coming days.
People look for safe havens when there are times of uncertainty and the dollar is considered a safe haven. Selling by foreign investors affects the foreign exchange reserves and increases the demand for the dollar, while the demand for the rupee decreases.
Significantly, india is dependent on imports from other countries for gadgets including mobile laptops along with essential electric goods and machinery. Most mobiles and gadgets are imported from china and other east Asian cities and most of the business is done in dollars. If the rupee continues to depreciate like this, imports will become costlier in the country.
Due to imports from abroad, their prices are sure to increase, which means inflation on mobiles and other gadgets will increase and you will have to spend more. Also, let us tell you that india buys 80 percent of its crude oil from abroad. It is also paid in dollars and due to the cost of dollars, the rupee will cost more. Due to this, freight will be expensive, and due to its effect, inflation will be hit further on everything needed.
The slowdown in domestic equity markets and frequent foreign fund outflows weighed on investor sentiment. Due to this, the rupee fell by 13 paise to close at an all-time low of 78.17 (provisional) against the US dollar on Wednesday. The indian currency opened at 77.99 at the interbank forex market and finally closed at its all-time low of 78.17, down 13 paise from its previous close of 78.04.
Gaurang Somaiya, Forex and Bullion Analyst at Motilal oswal Financial services said the US central bank is likely to hike interest rates by up to 50 bps. Hawkish remarks may support the dollar at lower levels. Major currencies remained under pressure following broad gains in the dollar. Meanwhile, benchmark Brent crude futures fell 1.07 percent to $119.87 per barrel.
Foreign investors continue to sell Looking at the domestic stock market, the BSE Sensex closed 152.18 points or 0.29 percent lower at 52,541.39, while the broader NSE Nifty closed 39.95 points or 0.25 percent lower at 15,692.15. Foreign institutional investors continued their sell-off, selling shares worth a net Rs 4,502.25 crore on tuesday, according to stock exchange data.
Significantly, on Monday, the first trading day of the week, there was a big fall in the indian currency rupee. As soon as the market started, it had broken 28 paise against the dollar and reached the level of 78 for the first time. The trend of decline continued on tuesday as well, while on wednesday this decline increased even more. Amid the continuing fall in the rupee, a report quoted experts as saying that the rupee may hit an all-time low of 81 against the dollar in the coming days.
People look for safe havens when there are times of uncertainty and the dollar is considered a safe haven. Selling by foreign investors affects the foreign exchange reserves and increases the demand for the dollar, while the demand for the rupee decreases.
Significantly, india is dependent on imports from other countries for gadgets including mobile laptops along with essential electric goods and machinery. Most mobiles and gadgets are imported from china and other east Asian cities and most of the business is done in dollars. If the rupee continues to depreciate like this, imports will become costlier in the country.
Due to imports from abroad, their prices are sure to increase, which means inflation on mobiles and other gadgets will increase and you will have to spend more. Also, let us tell you that india buys 80 percent of its crude oil from abroad. It is also paid in dollars and due to the cost of dollars, the rupee will cost more. Due to this, freight will be expensive, and due to its effect, inflation will be hit further on everything needed.