Shillong, September 19: The Indian rupee has reached a historic low of 83.2675 against the U.S. dollar due to surging crude oil prices in the global market. The future trajectory of the rupee will be closely tied to the fluctuations in global oil prices, which currently hover around $95 per barrel.
As per IANS, despite efforts by the RBI to inject dollars into the market to support the rupee, the currency’s decline persists. India’s heavy reliance on importing approximately 85 percent of its crude oil, necessitating immediate dollar payments, exacerbates the situation.
A foreign exchange expert from a private sector bank noted, “The RBI will continue to defend the rupee using its substantial foreign exchange reserves to control overall volatility, but there are limits to its interventions.”
Foreign investments in Indian stock markets have provided some stability to the rupee. However, these investments are considered “hot money” and can exit abruptly, making them an unreliable source of stability.
Rising oil prices, driven by extended supply cuts by Saudi Arabia and Russia, coupled with expectations of tighter supply, have induced panic buying and contributed to the escalating price levels.
Citi Bank predicts that benchmark Brent crude prices may surpass the $100 mark this year, echoing similar sentiments from Chevron CEO Mike Wirth.
