New Delhi, Oct 7 (EFE).- The Indian rupee on Friday dropped to a fresh all-time-low of 82.27 units per United States dollar as the market opened, continuing its rapid slide, mainly due to a resurgent dollar.
The rupee opened with a significant drop as “as investors bet (that) a robust US jobs data, due later today, will keep the US Federal Reserve on its aggressive tightening path to curb inflation,” financial consultancy EForex India said in its analysis.
The agency also highlighted the role of the spike in global crude oil prices, driven by the OPEC+ countries’ decision to cut down daily production by 2 million barrels to check the slide in prices in recent weeks.
The Indian currency has produced one of its worst annual performances this year, as it slid from under 75 units per USD in January to the current level.
As part of a sustained downward trend it has dropped far below its early 2018 exchange rate of 63.85 rupees per dollar.
The rupee’s depreciation has continued despite the Reserve Bank of India making efforts to intervene and protect the currency from a sharper fall, and EForex India said that the central bank has carried out dollar sales through state-owned banks since the beginning of the Russia-Ukraine war.
India has maintained a neutral position in the conflict, avoiding a strong condemnation of the Russian invasion and calling for dialog, but the Indian authorities have repeatedly criticized the economic impact of the conflict.
On Sep. 30, the RBI decided to elevate its key lending rate by 50 basic points to 5.9 percent in an attempt to check the inflation, which is hovering at around six percent and is expected to stay above or around 6 percent during the second half of the financial year 2022-2023 (ending in March).
The central bank has flagged the economic volatility caused by the strengthening of the US currency and the aggressive monetary policy in the West, while reducing India’s growth projection for the ongoing cycle to 7 percent.
Meanwhile the World Bank on Thursday pegged India’s GDP growth in 2022-2023 at an even lower 6.5 percent. EFE