The rupee fell to a new record low against the dollar on Wednesday as concerns about a global recession reemerged. This happened just two days after a member of the US Federal Reserve downplayed the chance of a severe and imminent economic downturn in the world’s largest economy.
According to market sources, the Reserve Bank of India (RBI) is thought to have sold roughly $1.5 billion through a combination of spot and forward-market operations using several state-run banks which is still to be confirmed by the central bank.
After the Philippine peso and Thai baht, the rupee had the third-worst performance in Asia on Wednesday, losing 0.4 percent. The local currency’s previous record low was 78.28/$, which it reached on June 13.
Despite a continuing war between Russia and Ukraine, crude oil prices are still high. Only until OPEC, the leading organisation of oil-producing countries, chooses to boost production is it likely to decline. Furthermore, there is much talk about the US perhaps easing sanctions on Iran, a major oil exporter. Over the previous four weeks, the price of Brent crude oil has been largely fluctuating between $105 and 125 per barrel. Given that India imports nearly all of its oil needs, high world oil prices are bad for the Indian economy.