Rupee hits record low against US dollar amid sustained dollar strength, trade war jitters

Rupee hits record low against US dollar amid sustained dollar strength, trade war jitters

The rupee tumbled to a record low of 87.38 against the US dollar on Wednesday, February 5. Earlier in the day, the Indian currency opened at 87.12 vs the greenback against Tuesday’s close of 87.07 vs dollar.

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The rupee breached the 84 mark against the US dollar for the first time in October 2024 and has since hit a series of lows.

The dollar index — which measures the American currency against the yen, the pound, the Canadian dollar, the Swedish krona, the Swiss franc and the euro — was last trading marginally lower, near the 108 mark. The value of the US dollar against a basket of six peers is inversely proportional to the value of the rupee. That is, if the value of the greenback rises, the value of the rupee depreciates, and vice versa.

“When we talk about the rupee-dollar rate, there are two elements to it – one is the appreciation of the US dollar… and much of what you see… is now due to the US (dollar) appreciation. So that is really not under our control, and not something our policymakers have to worry about,” NITI Aayog member Arvind Virmani told PTI. He said that India should look more closely at the rupee-yuan rate.

Crude oil benchmarks are steady amid trade war concerns. At the last count, Brent crude futures were trading lower at $76.06 per barrel. WTI futures were trading near flatline at $72.67 per barrel.

“The rupee is likely to remain volatile amidst global headwinds, fluctuating between 86.80 and 87.20,” Reuters stated, quoting Amit Pabari, managing director at FX advisory firm CR Forex.

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