Why rupee fell to a new record low against US dollar
Last Updated: 23rd August 2023 - 04:37 pm
The Indian rupee, it seems, cannot hold steady against the US dollar. On Monday, the rupee again went down hitting a record low of Rs 82.64 against the greenback.
But why is the rupee slipping now?
With the US Federal Reserve seen sticking to 75-basis-point rate hike after a stronger-than-expected US jobs data report, the rupee hit a fresh low.
Investors are pulling out of India as they take their capital to a much safer geography like North America or Europe.
How much has the rupee weakened in recent months?
The rupee has weakened over 11% so far this year, with the central bank defending the rupee via dollar sales that have depleted its forex reserves to the lowest level in over two years.
What is happening to the bond market and crude prices?
Yields on 10-year US Treasury notes inched towards 3.90%. The benchmark Brent crude contract inched closer to $100 per barrel after jumping more than 11% last week — its biggest such move in six months.
What about the US labour market?
Friday's data showed that US job growth slowed moderately in September while the unemployment rate dropped to 3.5%, pointing to a tight labour market.
What can the Reserve Bank of India do about the slide of the Indian rupee?
The RBI has had a stand-off-ish approach and even its few interventions have not helped the rupee from sliding.
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