New Delhi, Jul 5 (EFE).- The Indian rupee on Tuesday touched another all-time low at an exchange rate of 79.37 rupees per United States dollar, marking a 6 percent drop in its value this year, amid concerns over the country’s current account deficit.
The Indian currency has been inching closer to the psychological barrier of 80 rupees per USD over the past few weeks.
“High crude oil prices increase India’s import bill and subsequently weigh on the rupee, given that India is the third-largest oil importer in the world,” financial consultancy EForex India said on Tuesday.
Surging global oil prices have been a determining factor in the Indian currency’s volatility, since the country of over 1.35 billion people imports around 85 percent of its domestic petroleum consumption, which translates into the biggest chunk of its trade deficit.
In June, India’s merchandize exports jumped by 16.8 percent to $37.9 billion, the highest-ever mark in history, according to a report released on Monday by the ministry of commerce and industry.
Meanwhile, a strong showing by Asian stock markets on Tuesday also reflected investors’ confidence in the region, which could favorably affect the rupee, EForex said.
The Indian government has also begun to implement preventive measures to stop the depreciation, such as increasing import duty on gold, which could arrest the rupee’s slide.
The measure, announced last week, increased the tax on gold imports from 7.5 to 12.5 percent, which would help reduce India’s current account deficit, as the country imports most of its domestic gold demand.
The Reserve Bank of India has also unveiled measures to try and control inflation, and analysts have predicted greater intervention by the central bank in an attempt to check rupee’s devaluation. EFE