Millennium Post

Rupee hits all-time low at 56.57

On Thursday, the rupee hit all-time low of 56.57 on sustained dollar demand from oil importers amid a sharp fall in crude prices, before the Reserve Bank of India (RBI) intervened to help the local currency to recover some ground, but it still ended 15 paise down at 56.30.

The lesser-than-expected aggressive measures by the US Federal Reserve, weak economic Chinese data and a fall in the dollar’s main rival euro ahead of an audit of Spanish banks helped the American currency rise.

At the inter-bank foreign exchange (Forex) market, the domestic unit resumed weak at 56.35 a dollar as against last close of 56.15. The month-end dollar demand from importers, mainly oil refiners, to meet their requirements, put more pressure on rupee, as Brent crude hit an 18-month low of USD 91 per barrel.

This pushed the rupee to a record low of 56.57 (intra-day), eclipsing the previous low of 56.52 registered on 31 May. However, intervention by the RBI and a late rally in Indian stocks helped the rupee finally close at 56.30, down 0.27 per cent.

‘There was intervention by the RBI after rupee breached 56.40 level. However, if the domestic currency doesn’t close above 56.50 level, it will recoup to 55.80 level in near-term,’ said Hemal Doshi, currency strategist, Geojit Comtrade.

The rupee has fallen by 90 paise or 1.62 per cent in four consecutive days amid worries over country’s economic health.
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