Mumbai After the rise in the dollar index, the Indian rupee on Monday hit a new record low of 81.55 against the US dollar. In the interbank foreign exchange market, the rupee was trading at 81.55 against the US dollar 80.99 in the previous trading session. Gaurang Somaiya, Forex and Bullion Analyst, Motilal Oswal Financial Services said that the rupee has come down to the lowest level ever due to the strengthening of the dollar.
Hawkish Fed outlook, political instability in China and selling in pound after announcement of tax cuts are also troubling the overall market sentiment. This week, the RBI will release its policy statement and this is likely to impact the rupee which is currently depreciating sharply against the US dollar. The two-year US Treasury yield stood at 4.2 percent, the highest level since October 12, 2007. The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 114.58 to 113.513.
Brent crude oil prices are trading at $85.08 per barrel. According to reports, the Reserve Bank of India (RBI) is selling the dollar after the rupee hit an all-time low for the third consecutive session. There has been a steady decline in India’s foreign exchange reserves for the past few months due to the market intervention of RBI to save the weak rupee and trade deal of the country. This shortage is another possible reason for the rupee’s fall. Later in the week, the RBI is also set to raise rates. (IANS)
