Indian rupee on Friday weakened past 82 mark for the first time to hit a fresh record low against the US dollar amid a surge in crude and US bond yields.
At 9.30am, the home currency was trading at 82.30 a dollar, down 0.5% from its previous close of 81.89. The currency opened at 82.19 and touched an all time low of 82.33.
International crude oil advanced past $ 93 a barrel, up 11% this week spurred by Opec’s production cut. Ten year US treasury yields have jumped nearly 18 basis points since Tuesday.
“Well, if the oil again jumps above $ 100 per barrel, it will surely ring alarms and further stress the deficits and the rupee,” CR Forex said.
The Dollar Index bounced back from 109.80 levels to 112.12 in the last one month. Traders are now awaiting the US non-farm payroll and unemployment rate data due later on Friday.
Overnight, US Federal Reserve governor Christopher Waller said the Fed needs to keep raising interest rates into early next year to bring down stubbornly high inflation, in a hawkish speech suggesting he sees little reason to ease the pace of Fed policy tightening, Reuters reported.
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Meanwhile, the World Bank downgraded India’s economic growth forecast to 6.5% for FY23 citing deteriorating international environment.
According to CR Forex, the rupee fell sharply on Thursday as it was rumoured that some nationalised banks bought dollars for defence-related payments. One foreign bank is estimated to have bought 1 billion USD, which weighed on the rupee in the offshore market, CR Forex said.
Meanwhile, the 10 year bond yield hit a fresh four month high to hit 7.496% — a level last seen on 17 June. bond yield advanced nearly 20 bps in the last seven sessions.
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On Thursday, JPMorgan refrained from adding the Indian bonds to its emerging market debt index citing investment hurdles. Earlier this month, the London Stock Exchange Group that manages the FTSE indices said that it would continue to keep Indian bonds under watch for inclusion into the FTSE Emerging Markets Government Bond Index.
