5 Points: Rupee Hits A New 19-Month Low Against US Dollar

5 Points: Rupee Hits A New 19-Month Low Against US Dollar

Rupee Hits A New 19-Month Low Against US Dollar

New Delhi: On Wednesday, The rupee decreased by 37 paise or 0.54 per cent to close at a 19-month low of 68.61 against the US dollar. As per the reports of PTI, The increasing price of crude oil have led to the fear of a widening current account gap and an increase in inflation. Since November 24, 2016, when rupee had settled at 68.73, this is the lowest closing for rupee against the US dollar. The current amount of rupee against dollar was 68.68 in afternoon trade which prompting the Reserve Bank of India to intervene. After a short break, crude oil prices rebounded after the US asked its allies to end all imports of Iranian oil by a November deadline. Concerns over supply disruptions in Libya and Canada also flared up the prices.

1. In early Asian trade, Brent crude futures were trading up 0.5 per cent at $76.78 a barrel. The currency market was nervous when the Reserve Bank Of India painted a dismal image of the banking sector in its bi-annual money stability report. Higher inflation, issues over fiscal deficit and hawkish stance from the run have driven up bond yields, symptom bond costs. The 10-year benchmark bond yield shot-up to 7.87 per cent from 7.83 per cent.

2. The traders of currency were also worried about the future of global trade against the grim backdrop of an escalating trade rhetoric between the US and China. A pressure was added by massive selloff in domestic equities, fearing heavy capital outflows.    

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3. Last year, the rupee strengthened 5.96 per cent against the US dollar has now been on a general downtrend since the start of 2018. Nearly 7 per cent has been lost this year so far. The rupee has touched a historic low of 68.86 in November 24, 2016 and a lifetime closing low of 68.80 in August 28, 2013.  

4. A forex dealer told PTI, The market was cooled to some extent by the RBI's intervention, as exporters came forward to sell dollars. Sentiment remains weak and new support levels are becoming difficult to find, he added.    

5.  The reference rate for the dollar is fixed at 68.5246 and for the euro at 79.8654 by the Reserve Bank of India . The dollar index, which measures the greenback's value against basket of six major currencies, was up at 94.69. 

                                                               


 (Inputs from news agency PTI)

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