Why rupee fell to a new record low against US dollar

Rupee weakens

by 5paisa Research Team Last Updated: Aug 23, 2023 - 04:37 pm 13.5k Views

The Indian rupee, it seems, cannot hold steady against the US dollar. On Monday, the rupee again went down hitting a record low of Rs 82.64 against the greenback. 

But why is the rupee slipping now?

With the US Federal Reserve seen sticking to 75-basis-point rate hike after a stronger-than-expected US jobs data report, the rupee hit a fresh low. 

Investors are pulling out of India as they take their capital to a much safer geography like North America or Europe. 

How much has the rupee weakened in recent months?

The rupee has weakened over 11% so far this year, with the central bank defending the rupee via dollar sales that have depleted its forex reserves to the lowest level in over two years.

What is happening to the bond market and crude prices?

Yields on 10-year US Treasury notes inched towards 3.90%. The benchmark Brent crude contract inched closer to $100 per barrel after jumping more than 11% last week — its biggest such move in six months.

What about the US labour market?

Friday's data showed that US job growth slowed moderately in September while the unemployment rate dropped to 3.5%, pointing to a tight labour market.

What can the Reserve Bank of India do about the slide of the Indian rupee?

The RBI has had a stand-off-ish approach and even its few interventions have not helped the rupee from sliding.

How do you rate this blog?

or

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Open Free Demat Account
Resend OTP
Please Enter OTP
Account belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Swing Trading Stocks: Week of 3 October 2023

Swing Trading Stocks for the Week

  • Sep 29, 2023
Weekly Outlook on Gold - 29 September 2023

Gold prices are facing sustained pressure despite a backdrop of dollar weakness, a rare occurrence that coincides with a decline in yields on US Treasuries. Typically, the strength of the dollar and higher yields have been key components of the Federal Reserve's hawkish monetary policy.

  • Sep 29, 2023
Weekly Market Outlook for 3 October to 6 October

The last week of September turned out to be volatile as the markets corrected during the monthly expiry to test the 19500 mark. We witnessed a strong recovery in Friday’s session, and the index finally ended the week above 19600, with marginally weekly loss.

  • Sep 29, 2023