Rupee falls to 74.22 a dollar as oil, US currency gain strength
05 October 2018
The Indian rupee plummeted to an all-time low of 74.22 against the US dollar today, losing as much as 0.85 per cent from its previous close of 73.58. With today's fall, the Indian currency has lost over 15 per cent of its value against the greenback so far this year.
Rupee opened lower at 73.67 against the dollar in the Inter-bank foreign exchange market today and continued its plunge to hit a new record low of 74.22- the lowest-ever it has touched against the greenback, as rising oil prices, rising US interest rates, and a stressed financial market hurt sentiment.
Meanwhile, the Reserve Bank of India at its policy announcement toady, kept its repo rate unchanged amidst a fall in rupee and lower inflation rate.
Market, however, was hoping that the RBI will raise the repo rates and thereby the underlying bond rate, making investment in bonds attractive to foreign investors.
Foreign investors have been continuously selling Indian bonds as falling rupee and increasing interest in the US make investing in India unattractive.
Meanwhile, the change in RBI's policy stance from "neutral" to "calibrated tightening of monetary policy" led to an increased selloff in the equity market as market participants believe that a rate cut is not on cards in the near future. The BSE Sensex plunged by over 950 points to 34, 220 levels during the closing trade.