The Indian rupee dropped to an all-time low, 80.15, versus the dollar on Monday
The Indian rupee hit an all-time low of Rs 80.15 against the dollar on Monday due to likely dollar sales from the Reserve Bank of India. It recovered some of its losses to settle 10 paise down at 79.94 against the dollar. At the interbank foreign exchange market, the Indian rupee opened at 80.1 and fell to its all-time low of 80.15 against the US dollar in intra-day trade. It settled at 79.94 a dollar, down 10 paise over its previous close of 79.84. Safe-haven demand and rising Treasury yields lifted the dollar index, which gauges the greenback’s strength against a basket of six currencies, to its highest level in twenty years. The dollar index was trading 0.28 per cent higher at 109.10.
The RBI’s weekly statistical supplement data showed that the country’s forex reserves slumped to $570.74 billion in the week ending August 12, down by $2.238 billion from $572.978 billion in the previous week. Reserves have hit a record high of $642.45 billion in September 2021.
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Analysts expect the rupee to trade on a negative note on the strong dollar and weak global market sentiments. Concerns over global economic slowdown and inflation worries may also put pressure on the rupee. The US Fed adopted a hawkish stance and that is hurting Asian currencies. Hawkish means an aggressive stance that prioritises lowering of inflation and likely will raise interest rates.
A strong dollar is good news to those earning in dollars. It implies more Indian rupees for the same dollar. Dollar rising is good for IT and merchandise exporters. On the other hand, importers, like pharma and edible industries will have to pay more.
