The Indian rupee hits record low of Rs 95.83 against US dollar on Thursday, May 14, a day after the Indian government hiked import duty on gold, silver and platinum amid uncertainties over US and Iran tensions. The uncertainty also comes on the back of Trump and Xi's meet today.
The domestic currency is currently trading at Rs 95.8 against the greenback.
Rupee opened at Rs 95.72 against the US dollar, marginally weaker from its previous close.
Harshal Dasani, Business Head, INVAsset PMS says that the rupee's slide to a record low of 95.83 against the dollar reflects a tougher external environment rather than a one-day panic move. "Elevated crude oil prices, persistent dollar demand from importers, foreign portfolio outflows and overseas debt-related payments are all weighing on the currency at the same time. For India, higher crude is particularly uncomfortable because it directly pressures the trade deficit, inflation expectations and the current account."
He adds that the "The near-term bias remains negative, and further depreciation towards the 96–97 zone cannot be ruled out if crude stays firm or global risk appetite weakens. That said, this does not look like a disorderly fall yet. The RBI is likely to smooth excessive volatility, while India's services exports, remittances and forex reserves remain important buffers. For equities, a weaker rupee is positive for IT, select pharma and other export-driven sectors, but it is a headwind for oil marketing companies, aviation, paints, chemicals and other import-heavy businesses."
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
