Rupee weakens close to its record low, closes 83.650 against US dollar
rupee weakened against the dollar on Thursday, coming very close to its record low levels due to dollar outflows from corporates and volatility in oil prices, dealers said.
The rupee closed at 83.650 against the US dollar on Thursday, versus the previous close of 83.582, LSEG data showed. The all time low of 83.6650 was on June 20
Crude oil prices rose 0.5%, to $85.49 a barrel, according to Reuters. A rise in crude oil prices poses upside risks to Indias’ trade deficit and inflation as the country is a major importer of the commodity.
The rupee weakened despite a decline in the dollar index. The dollar index stood at 103.83, after declining to a four-month low of 103.6 in the previous session, according to LSEG Data. “The market has priced in a 100% 25 basis point rate cut in September, so the dollar index had to fall”, a foreign exchange dealer said.
“The Reserve Bank Of India intervened in the market amounting to almost $500 million”, said Anil Bhansali, Head Of Treasury at Finrex Treasury Advisors. “RBI was present at 83.60 levels, and when the rupee touched 83.65”, he said.
Yields on the 10 year benchmark government security remained stable. The yields closed at 6.96% today unchanged from the previous session, according to CCIL. Bond traders are keeping off large bets ahead of the presentation of the Union Budget on July 23.
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