Rupee Hits New Low Amid FII Sell-Off, High Global Crude Oil Prices

Indian Rupee To USD: Indian rupee hit a new low of 77.81 per USD on Thursday. The crude oil prices have remained elevated and FIIs have been on a selling spree in the Indian share market.

Indian Rupee To USD | New Delhi: As FIIs continued to exit the Indian share market, the Indian rupee hit a new low against the USD on Thursday. According to a report by Reuters, the partially convertible rupee was trading at 77.78 per dollar after hitting a low of 77.81 per dollar. The fall can also be attributed to a constant rise in global crude oil prices leading to imported inflation in the country.

The domestic share market was also trading flat. As of 1 PM, Sensex was up 52 points or 0.1 per cent at 54,945.27. Nifty50 was trading just over 16,300, 3 points lower than the previous close.

After China reported higher-than-expected exports in May, jumping 16.9 per cent (year-on-year), after easing lockdown restrictions, oil prices hovered near a 13-week high, Reuters reported. On Thursday, oil was trading at $123.43 per barrel. Shanghai, however, still remains under strict lockdown, capping the gains in the price of the commodity.

Foreign investors remained net sellers in the Indian share market. According to market data, FIIs sold shares worth Rs 2,484.25 crore.

RBI aims to bring inflation down

On Wednesday, in the Monetary Policy announcement for June, the RBI announced a repo rate hike by 50 basis points to 4.9 per cent. This is the second hike in two months, raising the repo rate by 90 basis points in toto since April 2022. To ensure liquidity in the economy, the Cash Reserve Ratio (CRR) was kept constant at 4.9 per cent.

The RBI tries to keep inflation at the level of 4 per cent (+- 2 per cent). However, due to high food and fuel prices, inflation has been recorded at 7.79 per cent in April 2022. RBI Governor Shaktikanta Das, in a post-policy press conference, said, “The target of 4 per cent does remain.”