Rupee falls 2 paise, Ends at Record Closing Against US Dollar

VoM News Desk | October 16, 2023 | 07:24 PM IST | Breaking News |

The Indian rupee closed at a record low of 83.28 against the US dollar on Monday, depreciating by 2 paise compared to the previous close of 83.26. The rupee had touched a record low of 83.29 in October 2022.

Factors Influencing the Exchange Rate

Several factors contributed to the rupee’s depreciation:

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Global Risk Aversion: Risk aversion in global markets played a role in weakening the rupee.
Surge in Crude Oil Prices: Rising crude oil prices exerted downward pressure on the Indian currency.
Geopolitical Tensions: The US and its allies attempted to contain the Hamas-Israel conflict, which reduced safe-haven demand for the US dollar.
Dollar Index: The dollar index, which measures the strength of the US dollar against a basket of six major currencies, fell by 0.13% to 106.51.
Inflation Data: India’s wholesale price index-based inflation remained negative for the sixth consecutive month in September at (-) 0.26%, largely driven by easing food prices.
Foreign Exchange Reserves: The country’s forex reserves dropped by $2.166 billion to $584.742 billion for the week ending October 6, according to the Reserve Bank of India (RBI).

Market Outlook

Despite these challenges, market analysts expect the rupee to trade with a slight negative bias. Factors such as risk aversion in global markets and elevated crude oil prices are likely to keep the rupee under pressure. However, the possibility of ceasefire or truce talks may offer support to the rupee.

The currency market in India remains influenced by various domestic and international factors, and the rupee’s performance continues to be closely monitored by market participants and policymakers.

VoM News Desk

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Rupee falls 2 paise, Ends at Record Closing Against US Dollar