At 95.07, Yet Another 'All-Time' Low for the Rupee Against the Dollar
New Delhi: The rupee has fallen to all-time low of 95.07 against US dollar in early trade today, April 30.
The currency fell to 95.2325, down 0.4%. This is a further slip from the previous all-time low of 95.21 in late March.
The rupee had already been slipping when the US-Israel strikes on Iran heralded a dismal outlook for global oil supplies and added to the absolute uncertainty of currency markets.
The downgrade comes as the impact of earlier measures by the Reserve Bank of India, to curb speculation has faded, allowing downward pressure to resume. Reports note, however, that intermittent dollar sales by RBI have helped limit sharper losses.
Reuters notes that the rupee has declined over 5% for the year so far, adding to a similar sized drop from last year as India's external sector faces persistent headwinds.
In addition to the energy disruption, struggles also come from India's trade struggles with the US – since the middle of last year – and the weakness in capital inflows. Persistent weakness in the rupee in turn erodes investors' confidence, hurting capital inflows further.
The Union government has claimed that the rupee is falling only with respect to the dollar, and not other currencies, but as The Wire has reported before, this does not stand up to scrutiny.
A report by a large Japanese bank, MUFG says that the falling rupee reflects something more worrying, from the Indian perspective – and that even if the most pressing global shock, oil prices, stabilise to pre-war levels, the rupee will remain at quite a low position against the dollar, The Wire has reported.
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