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Indian rupee drops all-time low for the 4th consecutive sessions, the price of rupee reached near 80 against the dollar

By Priyanka Verma 
Updated Date

New Delhi: On Thursday, The Indian rupee hit a record low for the fourth consecutive session against the US dollar. The US dollar has continued to rise against other major currencies.The rupee today fell to a new low of 79.74, having crossed the previous low of 79.66 in the previous session. The domestic currency closed at a record low of 79.62 against the US currency on Wednesday.

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The foreign institutional investors continued to dump Indian equities, putting further pressure on the Indian currency. The US dollar is a safe haven from rising fears of recession. At the same time, the rise in US inflation has also worsened the situation. Data released on Wednesday showed the consumer price index in the US rose to a 41-year high of 9.1% in June, partly due to supply chain constraints caused by the Ukraine war and rising demand.

Analysts fear that a slowdown in the world’s biggest economy is bound to exacerbate the pressure from outflows. The Rupee has already fallen over 6.5% this year amid fears of a global recession and deteriorating external balances fuel outflows. Rahul Kalantri, VP Commodities, Mehta Equities said, “We expect the dollar index to remain volatile in today’s session and continue to hold its key support level of 106.40 on a daily closing basis. On the other hand, the rupee slipped to lifetime lows on Wednesday. The euro is trading at 20-year lows, Japanese yen slipped to 27-year lows and other currencies are also struggling against the dollar. The rupee also plunged amid further weakness in the domestic equity markets and continuous FPI outflows. We expect the rupee to remain volatile this week and could hold its key support level of 80.05.”

The U.S. Fed is due to announce its next policy decision on July 27 and expectations that it would hike by 100 basis points (bps) versus the 75 bps being priced in earlier have risen post the inflation data. The agency expects that energy and food prices could peak in the next few months and then trend lower but the assumption is based on the premise that the military conflict in Ukraine does not escalate.

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