The Indian rupee dropped 30 paise to a record low of 95.94 against the US dollar in early trade on Friday, extending its decline for the third straight session. The pressure on the rupee comes amid heightened Middle East tensions, rising crude oil prices, and strong dollar yields.
According to forex traders, the Indian currency is under immense pressure and is nearly touching the 96-mark as dollar buying remains strong in other countries.
Besides, expectations of de-escalation in the Strait of Hormuz between the US and Iran remain low since China hinted at a more pacifistic position on the issue.
The USD/INR pair, which had slumped to 95.96 against the American currency on Thursday, recovered slightly before falling again after reports surfaced that India is considering a major cut in taxes paid by foreign investors on Indian bonds.
On Friday morning, the government announced a price hike in diesel by ₹3 per litre in a move to curb demand for the fuel.
At the interbank foreign exchange market, the rupee opened at 95.86 and then fell further to 95.94 against the US dollar, registering a fall of 30 paise from its previous close.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.05, higher by 0.24 per cent.
World leaders’ eyes and ears will be glued to fresh developments coming from Beijing as US and Chinese leaders are expected to continue their talks on the second day.
Also read: Sensex jumps 250 pts, Nifty up 76 pts in early trade
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