Rupee Collapsed to Fresh Record Low

INR vs USD: Growing fears about rising inflation amid high global crude oil prices weighed on the domestic currency today.

Indian rupee, collapsed to a fresh record low of 71 against the US dollar for the first time ever by falling 26 paise on persistent demand for the US currency amid rising crude prices, reported .

Weakness in almost all other Asian peers gave a boost to the dollar today. The partially convertible rupee was trading at 70.93/94 per dollar, compared with its previous close of 70.74.

It touched 71 per dollar in opening deals before recovering slightly on the back of dollar sales by state-run banks.

Things to know:

1. At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 70.95 a dollar and slipped further to hit its lifetime low of 71 from its previous close of 70.74.

2. Forex dealers said besides robust month-end demand for the American currency from oil importers, dollar’s strength against its rival currencies on expectations of rising interest rates amid lingering Sino-US trade tensions, weighed on the domestic currency.

3. On Thursday, the rupee slid further by 15 paise to close at a fresh lifetime low of 70.74 to the dollar due to strong demand for the greenback from oil importers and surging crude oil prices stoking inflation fears.

4. Growing fears about rising inflation in amid high global crude oil prices and consistent outflow of foreign funds from the domestic equity market also weighed on the domestic currency.

5. Traders said the Reserve Bank of India was likely sporadically selling dollars through state-run banks to prevent a sudden sharp fall but traders do not expect any major intervention as the fall has been in line with fundamentals.

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