Home / Business and Economy / Rupee Plummets to Record Low Amidst Oil Price Surge
Rupee Plummets to Record Low Amidst Oil Price Surge
14 May
Summary
- Rupee hit a lifetime low of 95.80/$ amid rising crude oil prices.
- RBI likely intervened by selling dollars to support the rupee.
- Rupee stability hinges on oil prices falling below $100 per barrel.
The Indian rupee reached an all-time low of 95.80/$ on Wednesday, marking its third consecutive session of significant depreciation. This decline was primarily driven by escalating crude oil prices, which surpassed $107.58 per barrel, increasing demand for dollars and prompting hedging activities.
Despite New Delhi's recent increase in import taxes on gold and silver, aimed at curbing private bullion purchases, these measures offered limited support to the rupee. The Reserve Bank of India was reportedly involved in intermittent dollar sales at key levels to temper the rupee's fall.
Market participants anticipate further actions from the RBI to stabilize the currency. Analysts suggest that the rupee's volatility is closely tied to crude oil price movements, and a durable turnaround is unlikely unless oil prices recede below the $100 per barrel threshold.
