Rupee at record low as it slips past 94 mark against US dollar

Rupee dropped to 94.1575 per dollar during the day. This is lower than its previous all-time low of 93.98, which was recorded earlier this week.

The rupee fell to a record low on Friday, slipping past the 94 mark against the US dollar, as concerns around the ongoing Middle East war continue to weigh on global markets.

The currency dropped to 94.1575 per dollar during the day. This is lower than its previous all-time low of 93.98, which was recorded earlier this week.

Since the war began late last month, the rupee has weakened by about 3.5%, showing the continued pressure on the Indian currency.

ENERGY CRISIS ADDS TO PRESSURE

The fall in the rupee is largely linked to worries about an ongoing energy supply crisis. The conflict in the Middle East has raised fears that oil supply disruptions may continue for a longer period.

India depends heavily on imported oil, and higher global crude prices increase the country’s import bill. This puts pressure on the rupee, as more dollars are needed to pay for oil imports.

Oil prices have stayed above the $100 per barrel mark, which has added to concerns across markets.

The rise in oil prices has not only affected currencies but also impacted global equities and bond markets.

Stock markets across the world have seen pressure, while bond yields have moved higher. This reflects growing concern among investors about inflation and economic growth.

For India, the impact is being closely watched, especially as the country is one of the largest energy importers.

GROWTH AND INFLATION WORRIES

Analysts have started to cut their growth forecasts for India due to the ongoing situation. There are also expectations that the Reserve Bank of India may have to raise interest rates over the next 12 months.

Higher oil prices can push inflation higher, which may require policy action from the central bank.

Even if the conflict does not last very long, risks remain.

Some global firms believe the rupee could weaken further in the coming months. Bernstein has said there is a realistic chance that the rupee may fall to around 98 per dollar this year.

The pressure is expected to come mainly from India’s current account balance, which could worsen if oil prices stay high.

For now, the rupee remains under pressure, and its movement will depend on how the global situation develops, especially the path of oil prices and the ongoing conflict in the Middle East.

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