Rupee hits Rs 80.15 against dollar, later recovers
Hyderabad: The rupee hit an all-time low of Rs 80.15 against the dollar on Monday due to likely dollar sales from the Reserve Bank of India. It recovered some of its losses to settle 10 paise down at 79.94 against the dollar. At the interbank foreign exchange market, the rupee opened at 80.1 and fell to its all-time low of 80.15 against the US dollar in intra-day trade. It settled at 79.94 a dollar, down 10 paise over its previous close of 79.84. Safe-haven demand and rising Treasury yields lifted the dollar index, which gauges the greenback’s strength against a basket of six currencies, to its highest level in twenty years. The dollar index was trading 0.28 per cent higher at 109.10.
Reserves fall
The RBI’s weekly statistical supplement data showed that the country’s forex reserves slumped to $570.74 billion in the week ending August 12, down by $2.238 billion from $572.978 billion in the previous week. Reserves have hit a record high of $642.45 billion in September 2021.
Analysts expect the rupee to trade on a negative note on the strong dollar and weak global market sentiments. Concerns over global economic slowdown and inflation worries may also put pressure on the rupee. The US Fed adopted a hawkish stance and that is hurting Asian currencies. Hawkish means an aggressive stance that prioritises lowering of inflation and likely will raise interest rates.
Impact
A strong dollar is good news to those earning in dollars. It implies more Indian rupees for the same dollar. Dollar rising is good for IT and merchandise exporters. On the other hand, importers, like pharma and edible industries will have to pay more.
“Dollar against rupee is at its peak considering the last five years of data. Scores of students, wanting to pursue foreign education, applied for loans in March/April. Then, the dollar was Rs 76. The same students are now asking for 7-8% more money as the dollar is rising. They need more money to buy dollars to pay for tuition and living. There is also a fear that this trend might continue for the next few months. Additional interest burden is going to kick-in after two years for many students. For every Rs 1 lakh they borrow now, they are going to pay Rs 40,000 in interest over time, said Shivani Mani, Head of Student Financing Success at GradRight, a Hyderabad-based ed-fintech that helps students to avail loans for higher education abroad.
Date USD/INR
March 2014 60.1
March 2015 62.59
March 2016 66.33
March 2017 64.84
March 2018 65.04
March 2019 69.17
March 2020 75.39
March 2021 73.5
March 2022 75.81
June 2022 78.94
July 2022 80
August 2022 80.15 (later settled at Rs 79.94)
