- Friday, January 17, 2025
Increased month-end as well as year-end dollar demand from importers and fear of an aggressive import tariff by the Donald Trump administration lifted the American currency
By: India Weekly
THE RUPEE stayed weak for the third straight session and fell 12 paise to settle at a fresh all-time low of 85.27 (provisional) against the US dollar on Thursday, amid a strong greenback and rising crude oil prices.
Forex traders said, increased month-end as well as year-end dollar demand from importers and fear of an aggressive import tariff by the Donald Trump administration lifted the American currency.
At the interbank foreign exchange, the rupee opened weak at 85.23 and touched the lowest-ever level of 85.28 against the greenback during intraday trade.
The unit finally ended the session at its lifetime low closing level of 85.27 (provisional) against the dollar, registering a loss of 12 paise from its previous close.
The rupee fell 4 paise to settle at 85.15 against the US dollar on Tuesday, a day after losing 9 paise on Monday.
The forex market was closed on Wednesday for Christmas.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally lower by 0.09 per cent but remained elevated at 107.93, amid soaring US Treasury yields (4.61 per cent) and the fear of delayed interest rate cuts by the US Federal Reserve.
Brent crude, the global oil benchmark, rose 0.56 per cent to $73.99 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex closed almost flat at 78,472.48 points, while Nifty inched up 22.55 points, or 0.10 per cent to close at 23,750.20 points.
Import bill
Meanwhile, a think tank Global Trade Research Initiative (GTRI) has said the depreciation of Indian rupee against the US dollar is expected to push the country’s import bill by about $15 billion (£11.98bn).
Compared to December last year, the Indian Rupee (INR) has depreciated 2.34 per cent against the US dollar, moving from ₹83.25 to ₹85.20, while the Chinese Yuan has weakened by 0.06 per cent, the Global Trade Research Initiative (GTRI) said.
It added that this depreciation of the Indian rupee will negatively impact gold imports, especially as gold prices have surged 27 per cent per ounce this December when compared with last December.
India’s oil imports, mostly priced in US dollar, could have been significantly costlier due to the rupee’s depreciation.
“Overall India’s import bill will increase by about $15 billion due to the INR depreciation impact,” GTRI Founder Ajay Srivastava said.(PTI)
