Indian rupee hits new high at 80 to the dollar
The Indian rupee hit 80 to the dollar on Tuesday (July 19th) for the first time ever, yet another record high, as international investors continued to offload Indian equities. The rupee fell to 80.06 against the dollar. The currency has been hurt by the country’s record outflow of foreign stocks of around $30 billion so far this year, with worries now over a growing current account deficit amid high oil and material prices. raw. Indian policymakers have taken a variety of steps to halt the rupee’s fall, ranging from intervention to raising import taxes on gold, Bloomberg reported.
According to Governor Shaktikanta Das, the Indian central bank intervenes in all segments of the market to reduce risk and support the orderly appreciation or depreciation of a currency. However, the Indian rupee hit a record high for the seventh straight session on Tuesday, Reuters reported.
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The RBI uses its $600 billion in foreign exchange reserves to defend the Indian rupee. In addition, the monetary authorities allowed settlement of trade in rupees and announced initiatives to increase foreign exchange inflows into the country.
However, Tuesday saw a decline in oil prices as the dollar fueled buying demand. As the West sanctions Russia, supplies have disrupted trade flows to refiners and been a thorn in the side of oil markets. At the same time, there are growing fears that the central bank’s efforts to rein in soaring inflation could lead to a recession, which would reduce future demand for fuel. Despite falling oil prices, several banks were already charging 80 rupees for every dollar in the exchange rate, the State Bank of India said.
Read also | The Indian rupee is expected to depreciate further, exceeding 80 per US dollar
However, the rupee is expected to fall to 82 to the dollar by September this year, according to strategists at Nomura Holdings Inc. and Morgan Stanley, Bloomberg reported.
It has been reported that the Rupee has been hitting new record lows virtually every other day for the past few months, and traders believe this trend will continue.
(With agency contributions)
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