Rupee Falls to All-Time Low of 87.88 Against US Dollar Amid Trump's Threats to Increase Tariff
New Delhi: The rupee fell to its all-time low level on Tuesday (August 5), ending with a loss of 22 paise at 87.88 against the US dollar amid fresh threats by US president Donald Trump to increase tariffs on Indian goods over the country continuing its oil purchases from Russia.
Forex traders predicted that the rupee is expected to slide further, reported Press Trust of India.
At the interbank foreign exchange, rupee opened at 87.95 against the greenback, its lowest-ever intra-day level that was previously recorded on February 10 this year. During the session, it touched the high of 87.75 against the American currency and at the end closed at 87.88, down 22 paise over its previous close.
Earlier on Monday (August 4), the rupee had depreciated 48 paise to close at 87.66 against the US dollar.
"We expect the rupee to continue to slide as India-US trade deal uncertainty continues to dent domestic market sentiments. Weak tone in the domestic equities and FII outflows may further pressurise the rupee," said Anuj Choudhary, Research Analyst, Commodities Research, Mirae Asset Sharekhan, reported PTI.
In the domestic equity market, the BSE Sensex declined 308.47 points and settled at 80,710.25, while the Nifty was down 73.20 to 24,649.55. Foreign institutional investors (FIIs) offloaded equities worth Rs 22.48 crore on a net basis on Tuesday, exchange data reveals.
Indian households deal with a surge in food prices
Meanwhile, owing to a weakening rupee along with factors such as, heavier-than-expected monsoon rain and lower crop production, Indian households are dealing with a surge in food prices.
In the last one month, prices of key staples including edible oils, rice, various flours and vegetables have increased sharply, putting pressure on kitchen budgets across the country, reported Economic Times.
Among the commodities which saw an increase included prices of mustard and sunflower oil, rice, and tomatoes rising by 50% sequentially in the last two-four weeks.
Wheat flour (atta), refined flour (maida), semolina (suji), and sugar have also witnessed price increases of up to 6% over the past month and are 8-12% higher year-on-year.
Prices of palm, sunflower, and soybean oil – that make up over 85% of India’s edible oil consumption – have surged since the past two months due to limited supply and low inventories,” said Rahul Guha, senior director at Crisil Ratings, reported ET.
According to industry data, in the past one month, prices of atta, maida, and suji have increased 5-5.5%, while wheat is up 3%, shows industry data.
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