India pushing Rupee as next global trade instrument
It is not just Western sanctions on Russia that accelerated the trend to circumvent the dollar, but the strength of the currency in the past year has also posed a challenge.
The Indian rupee on Friday, depreciated 16 paise to its all-time low of 82.33 against the dollar owing to a rise in US bond yields and climbing crude oil prices.
The rupee had closed at 81.89 on Thursday.
At the interbank foreign exchange, it was trading at 82.30 against the dollar in the morning after opening at 82.19 a dollar. Later, it touched an all-time low of 82.33 against the dollar.
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The rupee has fallen over 10% this year even though the Reserve Bank of India continues to sell its forex reserves to defend the local currency.
The all-time low plunge in the rupee has come a day after the World Bank had on Thursday cut India’s growth forecast for this financial year by a full percentage point amid rising inflation and adverse geo-political conditions.
In addition to this, the widening trade deficit driven by rising oil prices and a slowdown in exports has dragged the rupee down.
The decision to cut oil production by OPEC+ led crude oil prices to surge past $95 a barrel, for a fifth straight session. Brent crude rose over 7 percent in this period. The ten-year US treasury yields have jumped nearly 18 basis points since Tuesday.
CR Forex has said that oil again may jump above $100 per barrel. It will surely ring alarms and further stress the deficits and the rupee.
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