Rupee falls to 82.78 against US dollar

New Delhi: The Indian rupee on Tuesday fell to 82.78 per dollar. China’s Yuan also hits a new low against the US dollar.

Domestic equity markets also struggled to maintain early gains, and the BSE benchmark Sensex ended the day trading flat. According to exchange data, Foreign Institutional Investors sold shares worth 153.40 crore yesterday, making them net sellers in the capital markets.

The Bank of England is under increasing pressure to raise interest rates after data revealed that skyrocketing food costs have sent British inflation back to a 40-year high of 10.1%. Neel Kashkari, president of the Minneapolis Federal Reserve Bank, indicated late on Tuesday that the Federal Reserve may need to raise its benchmark interest rate above 4.75% if underlying inflation continues to rise.

Today, the price of Brent crude futures fell 0.2% to $89.87 a barrel.

“On the oil front, eyes are on Biden’s announcement later today on a plan to sell off the last portion of approx. 15 million barrels of his release from the nation’s emergency oil reserve by year’s end, and detail a strategy to refill the stockpile when prices drop. This can bring some volatility back in the oil. Well, a toss between slow demand in China and prospects of more supply cuts from OPEC+ have so far kept the oil traders in dilemma and the commodity to trade below three-figure mark,” CR Forex advisors said in a note.

According to analysts, the rupee is becoming less desirable for carry traders as a result of the Reserve Bank of India’s currency intervention. The rupee’s 12-month implied rates, which normally reflect interest rate differences with the US, have fallen to their lowest levels since 2011, as a result of government involvement in the spot and forward markets, decreasing its appeal.

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