Rupee plunges to all-time low of 77.84/$ amid rising crude oil prices

The rupee hit a fresh all-time low on Friday amid dollar gaining strength and elevated global crude oil prices.

The currency closed at a record low of 77.84 against the dollar after hitting 77.88 in intraday trading. On Thursday, the rupee closed at 77.77 per dollar, making it a third consecutive trading day when the Indian currency hit all-time closing low.

Currency dealers said the central bank continued its intervention in the foreign exchange market, which slowed the pace of the fall of the rupee.

“Rupee hit its fresh all-time low but has, in the past few sessions, been very resilient and is consolidating in a narrow range despite volatility in domestic and global equities and strength in the dollar against its major currencies,” said Gaurang Somaiya, forex & bullion Analyst, Motilal Oswal Financial Services.

The rupee came under pressure since the worsening geopolitical crisis after Russia invaded Ukraine in late February. The Indian unit depreciated 2.64 per cent against the dollar in the current fiscal year and 0.26 per cent in this month.
 

Pressure on the rupee is expected to continue and could breach the 78 against the dollar mark in the next few sessions, analysts said.

“The rupee felt the pressure as dollar prices traded above $103.50 & crude prices held above $120/bbl in both Brent & Nymex. The rupee can be seen in the range of 77.75-78.00 given the current situation,” said Jateen Trivedi, V-P research analyst at LKP Securities.

The central bank has been intervening aggressively in all segments of the currency market. The country’s foreign exchange reserves fell around $30 billion since the war in Europe started. Latest data released by RBI on Friday showed, the total reserves fell $306 million for the week ended June 3 to $ 601 billion.