Rupee falls 18 paise to close at all-time low

The Indian rupee slipped to a fresh all-time low amid a large futures expiry. Bonds yields rose amid higher crude prices given India’s dependence on oil imports. USD/INR gains 0.5% to close at 78.7688; rose to a record 78.8613 in session. India’s central bank will roll over some of its foreign- exchange derivative contracts as it seeks to slow the pace of the rupee’s decline.

Back to back weakening of rupee will make imports more expensive, thereby increasing inflation and this will in turn lead to increase in trade deficit. Some more selling from forex reserve might be necessary.

1 Like