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Indian rupee closed at all-time low of 78.32 against US dollar

By Priyanka Verma 
Updated Date

New Delhi: On Thursday, Indian rupee closed at its all-time low at 78.32 against the US dollar at the interbank forex market on the back of a strong greenback and consistent foreign funds outflows offsetting gains of domestic equities. At the interbank foreign exchange market, the local currency opened at 78.26 and finally settled at its all-time low 78.32, unchanged from its previous close.

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As long as crude oil prices stay above $95 per barrel, the rupee is expected to be vulnerable. On Wednesday, the rupee declined by 19 paise to settle at an all-time low level of 78.32 against the US dollar.

The Indian rupee erased early morning gains as safe-haven demand drove the greenback ahead of quarter-end adjustments, said Dilip Parmar, Research Analyst, HDFC Securities. Parmar further said that there is a high chance of a near bounce amid a fall in commodities, strength in regional currencies and recovery in risk assets. ”Spot USDINR is expected to be in the narrow range of 78.10 to 78.50 before heading towards 79 odd levels,” Parmar said.

Jateen Trivedi, VP Research Analyst at LKP Securities said, “Rupee traded in a range between 78.20-78.40 ended near 78.30 as the dollar traded neutral along with capital market range bound volatile day kept range-bound moves.” “Rupee weakness can continue till the time Crude stays above $95, any breach below $95 and lower level sustained on Crude shall provide strong support to the rupee,” he added.

Today, crude oil prices retreated as investors re-observed the risk of recessions and fuel demand outlook amidst rising interest rates scenario. However, crude oil prices remained above $100 per barrel levels. The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.41 per cent to 104.62. Brent crude futures, the global oil benchmark, declined 0.99 per cent to USD 110.63 per barrel. Brent crude futures, the global oil benchmark, declined 0.99 per cent to USD 110.63 per barrel.

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US Federal Reserve Chair Jerome Powell has stated that higher rates are painful but are the means the central bank has to slow inflation. He also said that the Fed is not trying to engineer a recession to heel inflation but is fully committed to bringing prices under control even if doing so risks an economic downturn.

ICICI Direct in its research note earlier today said, “the rupee may be supported by falling crude oil prices. However, investors will closely watch US initial jobless claims data as it is expected to fall from 229,000 to 227,000.”

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