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Rupee is once again battered, opening at a new low of 82.67

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jhSAAAAAElFTkSuQmCC Rupee is once again battered, opening at a new low of 82.67

After breaking the 82-per-dollar barrier for the first time on Friday due to crude prices nearing $100 a barrel and robust US employment data suggesting an aggressive rate rise path, the rupee began at a fresh record low for the second consecutive day on Monday.
According to Bloomberg, the rupee last traded at 82.6650 to the dollar, down from its previous close of 82.33 on Friday. It had started the day at a record low of 82.6725 and had reached its lowest point of 82.6950 during early trade on Monday.

The rupee touched its previous record low of 82.4275 to the dollar on Friday, losing more than 10% of its value this year despite the Reserve Bank of India continuing to sell foreign exchange reserves to support the rupee.

Worries about rising oil costs and Treasury rates, corporate withdrawals, and demand for the dollar have all contributed to the rupee frequently hitting record lows in recent sessions.

Since Russia invaded Ukraine in late February, the RBI has spent about $100 billion of the nation’s foreign exchange reserves. Still, unlike in the past, it has been unable to stop the rupee’s slide.

The RBI has previously prevented the rupee from exceeding 80 to the dollar for nearly 50 days.

IFA Global Research Academy declared that “the double combination of increased US rates and higher crude prices is back to haunt the rupee.”

While the RBI effectively defended the rupee during the previous cycle of simultaneous stress on the current and capital accounts by using its reserves, things are likely to be different this time.

On Monday, oil took a break and dropped from its 5-week highs, but Brent crude was still very close to $100 a barrel.
Analysts now expect Brent to hit $100 per barrel in the upcoming months, upping their previous projections for oil prices.

Given that India imports more than 80% of its oil requirements, its issues with inflation and expanding current account deficit (CAD) would only worsen as crude prices climb.

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