Indian Rupee Hits Record Low of 96 Against US Dollar Amid Rising Oil Prices
Rupee slides to record low, crosses 96 vs USD for the first time
The Economic Times
Image: The Economic Times
The Indian rupee fell to a record low of 96.05 per US dollar, driven by rising oil prices nearing $110 per barrel and increasing U.S. bond yields. This depreciation reflects ongoing challenges in India's external sector and has prompted economists to predict further rate hikes by the Reserve Bank of India.
- 01Brent oil prices increased to $107 per barrel, influenced by geopolitical tensions with Iran.
- 02The U.S. 10-year bond yield rose to 4.53%, the highest in a year, raising concerns over inflation.
- 03India raised petrol and diesel prices for the first time in four years by over 3%.
- 04Economists expect the Reserve Bank of India to maintain interest rates unchanged until 2026.
- 05Investors are looking forward to India's merchandise trade data for April, which is set to be released soon.
Advertisement
In-Article Ad
On Friday, the Indian rupee fell to an all-time low of 96.05 against the U.S. dollar, surpassing its previous low of 95.9575. This decline is attributed to rising Brent oil prices, which approached $110 per barrel, amid geopolitical tensions involving Iran. The recent comments from U.S. President Donald Trump regarding Iran have contributed to market volatility, with Brent oil prices gaining over 1% to reach $107. Additionally, the U.S. 10-year bond yield increased to 4.53%, reflecting concerns about inflation driven by energy prices and speculation about potential Federal Reserve rate hikes. In response to these pressures, India has raised petrol and diesel prices for the first time in four years, by more than 3%. Economists from Barclays predict that the Reserve Bank of India (RBI) will keep interest rates unchanged until 2026, while also implementing measures to attract foreign capital inflows to stabilize the rupee. Investors are keenly awaiting India's merchandise trade data for April, which could provide further insights into the economic landscape.
Advertisement
In-Article Ad
The depreciation of the rupee may lead to increased fuel prices and higher costs for imported goods, affecting consumers and businesses in India.
Advertisement
In-Article Ad
Reader Poll
How do you think the falling rupee will impact the Indian economy?
Connecting to poll...
More about Reserve Bank of India
Read the original article
Visit the source for the complete story.