Rupee ends at 79.8775 against the dollar
The rupee hit a record low on Friday as foreign investors continued to dump riskier assets amid rising concerns around a global recession with investors now awaiting the Fed meeting outcome on July 27.
The rupee ended trading at 79.8775 to the dollar just a shade weaker than Thursday’s close of 79.8750. Earlier it hit 79.96, touching an all-time low for the fifth consecutive session
The Indian rupee nearing 80 to a US dollar will make imports of items from crude oil to electronic goods, overseas education and foreign travel costlier while raising fears that the inflation situation could worsen.
The primary and immediate impact of a depreciating rupee is on the importers who will have to shell out more for the same quantity and price. However, it is a boon for the exporters as they receive more rupees in exchange for dollars.
The rupee depreciation has wiped away some of the gains that would have accrued to India from international oil and fuel prices dropping to pre-Ukraine war levels.
India is 85 per cent dependent on foreign oil to meet its needs for fuels, such as petrol, diesel and jet fuel.
The rupee, which on Thursday closed at an all-time low of 79.99 to a US dollar, appreciated 7 paise to 79.92 in early trade on Friday.
The basket of Indian imports includes crude oil, coal, plastic material, chemicals, electronic goods, vegetable oil, fertiliser, machinery, gold, pearls, precious and semi-precious stones, and iron and steel.
Ajay Sahai, Director General of Fieo, an apex body of exporters, said the rupee touching 80 against the US dollar will push India’s import bill and it will make containing inflation a much more difficult task.
“Prices of imported intermediate goods will go up and that will push manufacturing cost of businesses, who would pass that cost on to the consumers, which would push the price of goods.
Published on July 15, 2022