New Delhi: The Indian rupee continued its downward trend on Friday and hit a fresh low of 71 against the US dollar for the first time. Compared to Thursday’s closing, the Indian currency was down 26 paise. Including today’s fall, the rupee has depreciated nearly 3.3 per cent in August so far and is set for its biggest monthly fall in three years.
Analysts say the recent weakness in the rupee is on account of increased dollar demand amid rising crude prices. Brent crude futures, the benchmark for the international crude price, touched $78 per barrel mark in early Asian trade.
At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 70.95 a dollar and slipped further to hit its lifetime low of 71 from its previous close of 70.74.
Forex dealers said besides robust month-end demand for the American currency from oil importers, dollar’s strength against its rival currencies on expectations of rising interest rates amid lingering Sino-US trade tensions, weighed on the domestic currency.
Yesterday, the rupee slid further by 15 paise to close at a fresh lifetime low of 70.74 to the dollar due to strong demand for the greenback from oil importers and surging crude oil prices stoking inflation fears.
The domestic currency is the worst performing Asian currency in this year so far, down 9.90 per cent.
Growing fears about rising inflation in amid high global crude oil prices and consistent outflow of foreign funds from the domestic equity market also weighed on the domestic currency. (With agency inputs)