Indian Rupee Hits Record Low Of 77.8125/Per US Dollar

Indian rupee in trade on June 9, 2022 hit a fresh low of 77.8125. In the session today, rupee opened at 77.75 per US dollar as against the previous close of 77.7 per dollar.

The soaring crude oil prices and weak equities are nudging the domestic unit to a fresh low. The rise in the crude oil price weighs on the currency as it leads to a higher imported inflation as much of India's crude oil requirement is imported.

Oil prices held firm near 13-week highs today after China reported stronger-than-expected exports in May, although new Shanghai lockdown restrictions capped gains.

Meanwhile, equities also were trading soft but now having recouped day's losses are marginally in the upward trajectory.

"India's central bank raised the key policy repo rates by 50 basis points to 4.9%, rising for the second straight month and joined the league of central banks that has increased rates by half points in order to tame the surging inflation. Meanwhile, RBI telegraphed the withdrawal of accommodation going forward and raised inflation forecasts to 6.7% for FY23. Though rate hikes might not help much in the supply side inflation, they could cool down the demand. Going forward, we might see the Rupee spot weakening towards new all-time lows amid weak fundamentals. Elevated crude oil prices, bounce back in the dollar index and persistent FII outflows ahead of FOMC meeting might prompt gradual depreciation in Rupee towards 78.2 levels", notes Jigar Trivedi, Research Analyst- Commodities & Currencies, Fundamental, Anand Rathi Shares & Stock Brokers.