The Indian rupee crossed the 71-mark against the US dollar for the first time ever in early morning trade today. The rupee slumped by 26 paise (0.4 percent) from its previous close to 71.0013 against the dollar, as the rising crude oil prices continue to pressurize the local currency. It has fallen by 9.96 percent so far this year, making it the worst performing currency in Asia.
The weakening of the emerging market prospects, elevated oil prices that have widened trade deficit and fears fiscal slippage from an uncertainty in the upcoming general elections in 2019 have hurt the rupee greatly. There has been added pressure from the strength in the dollar, which has been high in demand in the international market owing to the possibility of two more interest rate hikes from the Federal Reserve.
The official data released on Thursday showed a higher-than-expected annualized growth in the USA's second-quarter gross domestic product (GDP) and this cemented expectations for an interest rate hike among traders that is due in September. The demand for the American currency thus grew.
Meanwhile, fuel prices in all four metro cities have hit new all-time highs in three metro cities, that is in Delhi, Kolkata and Chennai. Petrol per litre was priced at Rs 78.52 in Delhi, Rs 81.44 in Kolkata, Rs 85.93 in Mumbai and Rs 81.58 in Chennai. These rates are revised every day by the Indian oil marketers on a daily basis at 6 am in the morning based on the international rates in the previous session.
In the international market, benchmark Brent was up by 7 cents to $77.21 per barrel and US West Texas Intermediate increased by 14 cents to $69.65 a barrel on Thursday.
Global crude prices have hit multi-week highs owing to the unexpected fall in US inventories that dropped by 2.6 million barrels for the week ended 24 August to 405.79 million barrels. The second week of decline in inventories accompanied by the record high demand for gasoline led the prices skyrocketing.