MUMBAI: The Indian rupee on Wednesday fell 0.6 per cent to hit a fresh record low of 70.51 against the US dollar. The domestic unit’s previous record low was 70.3950 on August 16. Wednesday’s fall is again not an isolated instance as other Asian currencies too fell after a robust US consumer confidence data aided the dollar rally. The rupee has been at its worst, having lost more than 9 per cent in value so far this year. This month alone, it plunged 2.84 per cent and appears to be diving for the seventh straight month in August — its longest losing streak in nearly 18 years.
“The rupee has depreciated today on account of month-end dollar demand from importers. Crude oil prices have also increased in the international market in the last couple of sessions. This has pressurised the rupee. The focus will now shift to India’s GDP and fiscal deficit data due to be released on Friday. The near-term range for the rupee is 70.20 and 70.75,” said Rushabh Maru, Research Analyst, Anand Rathi Shares and Stock Brokers.
The RBI may likely sell dollars to stem the rupee fall, though it has not done it so far. Selling dollar is the textbook method of defending the currency, but it appears that the central bank is refraining from doing so. This is in line with the dominant view that the rupee is overvalued and a correction is only appropriate.
In the recent past, the RBI did intervene when it tried to protect the rupee at 69 level, selling dollars. Around $26 billion worth forex reserves have been deployed to prevent the rupee from weakening further.
Petrol, diesel costs continue to surge
New Delhi: Amidst rising crude prices and a weakening rupee, the fuel prices have continued to rise in India, going up by almost a rupee per litre within a fortnight. On Wednesday, the petrol price was hiked by 13 paise a litre and diesel by 14 paise a litre.