Indian Rupee held its own on Thursday, losing initial gains and ending with no change at 88.79 to the US dollar, barely scratching the records, market reports stated. To date in the year, the domestic currency has gone down by 3.71, which depicts that there is still volatility in the global and domestic financial markets. It is important to note that the Rupee was also trading at 88.79 on Wednesday, and this indicates a consecutive period that is close to its lowest levels.
The Rupee movement was affected by a weakened play of the US dollar, which fell after reaching the maximum point of the month, which was early August. The dollar index that measures the dollar in relation to a basket of six leading currencies fell by 0.01 percent on Thursday to 98.91. According to analysts, although the Rupee is subject to the global currency movements, its domestic performance has remained critical to its movements, including the crude oil prices and the flow of foreign funds.
On the commodities side, the price of crude oil slipped a notch lower on reports of a ceasefire plan between Israel and Hamas, which assisted in the realignment of the premiums of geopolitical risk in the Middle East. Brent crude dropped 0.20 percent to $66.12 per barrel, and WTI crude dropped 0.27 percent to 62.39 per barrel at 3.35 PM IST. The fall of oil prices relieves the Indian economy to some extent since India is a major importer of crude oil products, and the fall of oil prices can relieve the burden on the current account and inflation.
In general, the all-time low of the Rupee reflects the difficulties that the domestic currency is experiencing in an underdeveloped, dynamic environment with fluctuation in oil prices, global dollar, and economic unpredictability. One of the key aspects that are being monitored by the market players is the foreign inflows, global crude prices, and the moves of the US dollar to determine how the Rupee will perform in the short run.
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