Ahead of Budget, Rupee Slips to All-Time Low

New Delhi: A day before the Union Budget is to be presented, the rupee slipped to an all-time low on January 31.

It was 86.65 against the dollar. Earlier in January, it had been 86.6475.

The 86-mark was held to be psychologically significant.

Its is like that new US president Donald Trump's threats of trade tariffs on Canada and Mexico, and additional ones on China have weighed heavy.

Reuters has indeed reported that the dollar index was higher at 108.2 while most Asian currencies declined after Trump's fresh warnings this weekend.

The news agency also quoted traders to say that state-run banks were spotted offering dollars, most likely on behalf of the Reserve Bank of India.

Meanwhile, Bloomberg reports that the RBI has injected "$5.10 billion through a foreign-exchange swap auction," to ease the severe cash crunch.

According to the report, this is the first time in five years that the system has been used.

"The infusion takes the amount poured into India’s banking system to more than $7 billion in the past two days and is part of the Reserve Bank of India’s broader $18 billion plan to address the tightness in domestic money markets," the report says.

The RBI accepted 28 bids, Business Standard reported, totalling $5.1 billion. The premium cut-off had been set at 96.81 paisa, slightly below the prevailing market level.

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