Rupee Slips to Near-Record Low as Opening Value Hits 96.37 Against Dollar

Indian Rupee Hits New Low Against US Dollar

The Indian rupee opened two paise lower on May 19 at 96.37 against the US dollar, surpassing the previous session's record closing low. This decline comes as Brent crude prices remained near $110 a barrel.

The rupee's value against the dollar has been fluctuating, trading at 96.37 after ending the previous session at 96.35. On May 18, the rupee had fallen to a new low of 96.39 in intraday trade. The currency has been under pressure due to various factors, including a decline in global confidence and increased volatility.

Brent crude prices eased slightly overnight following a statement from US President Donald Trump, who announced that he would pause an attack on Iran to allow for negotiations to come to an end. Although Trump indicated that there is a good chance of both the US and Iran reaching an agreement, traders remain cautious.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The Indian government has raised fuel prices for the second time in the last seven days. The petrol price was raised by 87 paise per liter, while the diesel price was increased by 91 paise per liter. This move has added to the pressure on the rupee, which has been weakened by the global economic situation.

Weakness in Asian Peers Contributes to Rupee's Decline

The rupee is on a seven-day losing streak, shedding 2.2 percent and hitting new lows. This decline is attributed to weaknesses in Asian peers, subdued risk appetite, and high US yields, which have all contributed to the rupee's decline.

Since the US and Israel attacked Iran on February 28, the rupee has fallen more than 5.5 percent. The ongoing cycle of rupee weakness shows no signs of abating, with a meaningful shift in the underlying drivers needed to halt the decline. This shift could be achieved through a correction in oil prices or concrete steps to boost dollar inflows.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Note: The above table presents a comparison of the rupee's value against the US dollar for the specified periods.