On Monday the rupee fell by 84 paise and closed at its lifetime low of 77 rupees against the US dollar.
Previously on Friday, the value dropped by 23 paise closing at 76.17, marking the lowest closing level since December 15, 2021.
The ongoing aggressive Ukraine and Russia conflict has increased the geopolitical risks forcing the investors to safe haven assets.
The Vice President of commodity and Currency Research, Religare Broking Ltd, Sugandha Sachdeva stated- “The Indian rupee has plummeted to a lifetime low against the US dollar as the deepening Russia-Ukraine conflict has sapped risk appetite in the market while prompting safe-haven flows into the US dollar”.
The hike in global crude oil prices triggered the local currency. Crude oil prices reached their highest since the 2008 financial crisis. The prices hit $139 a barrel which increased tension about domestic inflation and wider trade deficits.
Strong appreciation in the US dollar which is believed to be a safe investment amid the Ukraine and Russia crisis is also a reason behind the rupee’s big fall.
In Tuesday’s opening trade the rupee raised 20 paise to 76.73 against the USD amid a slight decrease in crude oil prices and a weak dollar. But according to Forex traders appreciation in the rupee will be limited due to the current Ukraine-Russia conflict.
As per Economic Times , the Reserve Bank of India (RBI) is estimated to have sold around $1.5 billion in the spot market in order to prevent further losses in rupee and foreign exchange market.
Sirram Iyer, who is senior research analyst at Reliance Securities, mentioned that, the RBI’s dollar-rupee sell and buy exchange worth $5 billion on Tuesday will help traders to estimate central Bank’s stance on rupee and forwards.
Concurrently, the dollar index fell 0.16% to 99.13 and Brent crude futures jumped 1.79% to $125.41 per barrel.