INDIAN RUPEE TO DEPRECIATE FURTHER, TO BREACH 80 PER DOLLAR

Thu 14 July 2022:

Analysts have predicted that the Indian rupee is about to cross the 80-rupee threshold against the US dollar as it has fallen to historic lows against the U.S. dollar.

The Indian currency has been under pressure for the past four to five days as foreign institutional investors have continued to sell Indian equities in search of US dollars that are a safe haven.

The rupee to dollar exchange rate was at 74 at the start of the year. But the rupee has come under a lot of pressure due to concerns about the recession, the Russian invasion of Ukraine, and the subsequent rise in oil and gas prices.

According to Bloomberg data, the currency has slumped to a new record low level 26 times since Russia invaded Ukraine late in February

On Thursday, the local currency opened trading at a lifetime low of 79.71 (provisional) per US dollar compared to its previous close of 79.63.

Analysts believe that the rupee-dollar exchange rate will most certainly touch 80 as the experts expect the United States Federal Reserve to hike the interest rates by another 75 to 100 basis points at the end of the month to tackle hot inflation. This will further trigger the outflow of dollars from India and back to the US.

“Rupee is expected to depreciate today (Thursday) amid strong dollar and risk aversion in global markets. Market sentiments are hurt as red hot inflation in the US stoked bets that the US Fed may have to raise interest rates much more than expected, even 100 bps. Additionally, consistent FII outflows and concerns on looming recession may hurt rupee. US$INR (July) is expected to trade in a range of 79.50-80.00,” said ICICI Direct in a statement.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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