The rupee on Thursday slipped by 13 paise to touch a record low of 77.81 against the US dollar amid a surge in crude oil prices and rising inflation, ANI reported.
Brent crude oil cost $123.42 (or Rs 9,598.55) a barrel on Thursday. Brent is a global price benchmark for crude oils from the Atlantic basin. It is used to set the price of two-thirds of the world’s trade of crude oil supply.
India imports nearly 85% of its oil. An increase in prices can push up inflation domestically, as well as widen the nation’s trade and current account deficit.
In April, India’s retail inflation rose to an eight-year high of 7.79%. Meanwhile, the price rise indicator in wholesale markets was at 15.08% in April. It has now remained in double digits for 13 consecutive months.
The Reserve Bank of India on Wednesday raised the inflation forecast by 0.1% to 6.7% for the financial year 2022-’23.
It also increased the repo rate by 50 basis points to 4.90% in an attempt to control inflation. Repo rate is the interest rate at which the central bank lends to commercial banks. The reverse repo rate, on the other hand, allows banks to deposit funds with the central bank and earn interest on them.
“Further depreciation in the rupee will be seen if levels around 77.80 start to be breached consistently,” currency analysts at Emkay Global said on Thursday, according to Reuters. “This will open targets of 78.25 for the rupee.”
On Thursday, the 30-share BSE Sensex finished trading at 55,320.53, up by 0.78% since Wednesday. The broader 50-share NSE Nifty closed at 16,478.10, an increase of 0.74%.
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