The Indian Rupee got eroded further in its value and lost another 34 paise against the US dollar at the end of the trading on Wednesday, recording a 13 month low of 42.44/45 against the previous day’s close of 42.10/12 at the interbank foreign exchange market here.This was mainly due to heavy demand fro dollar from oil refineris.
Global oil prices surged to more than $ 126 a barrel on tuesady.The Rupee had lost around 86 paise or 2.07 percent in the last three continuous trading sessions.
It opened lower at 42.20/22 and recorded a low of 42.67 in intra day before closing at 42.44/45.The demand for dpllar was due to rise in crude oil price which was around $126 a barrel on Tuesday.
However, when the market opened on Wednesday in early deals, it dropped to around $ 123.50 after touching a new peak of $126.98 in intra day trading in New York on Tuesday.Capital outflow was another factor for a fall in rupee value.Foreign institutional investors reportedly taken over $ 220 in three days since May.8.
Eventhough US consumer prices showed weakness for April, the dollar rebounded against the Euro inearly trading on Wednesday.
US stock indices, Dow and Nasdaq, also showed strength when the markety opened Wednesday in the US.The dollar was also up against the Japanese Yen on Wednesday.
We have to only wait and see what will be the reaction of the Indian Government, to the above scenario especially from the Finance Ministry.