Rupee weakens further, makes record closing low of 83.97
rupee weakened to a record closing low of 83.97 versus the US dollar on Monday, mirroring the secular decline in Asian currencies that fell on risk aversion ahead of the publication of US consumer price inflation data later this week.
The rupee was also pressured by a rise in crude oil prices.
The unit closed at 83.9725 as against its last close of 83.955, LSEG data showed. The currency was trading in a tight range of 83.95 and 83.97. At the beginning of 2024, the rupee was trading at 83.2375.
The RBI likely sold dollars to cap the weakness in the rupee and avoid the currency from touching 84.00/$1, traders said.
The US CPI data is set to be published Wednesday after market hours. Analysts expect the gauge to be at 3%, higher than the Federal Reserve's target of 2%..
Weak employment data published recently in the US have raised concerns of a slowdown in the world's largest economy, sparking a global wave of risk aversion and volatility in the emerging market currencies.
Crude oil prices rose marginally to $80.32 per barrel on Monday, from $79.14 per barrel on Friday, according to Reuters due to uncertainty in the Middle East.
A sharper-than-expected fall in US inflation would strengthen the odds of the Federal Reserve lowering interest rates, which in turn would lead to a weaker dollar index and bode well for emerging market currencies.
“Whenever there are growth concerns in the developed market, the currency of the emerging market will be pressured due to risk aversion. These currencies will be pressured
