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Rupee hits record low as fuel prices touch fresh highs

04 October 2018

"Breaking: Rupee slips to 73.77. It's not breaking - it's Broken".

Gandhi Wednesday hit out at Prime Minister Narendra Modi questioning his silence over the falling value of the Indian Rupee.

The rupee opened lower at 73.26 per dollar on Wednesday due to high crude oil prices against the last close of 72.91 per dollar.

India's inflation rate was 3.69 percent in August and is expected to go above the RBI's projected 5 percent by June 2019 on higher fuel prices, the weak rupee and strong consumer spending.

"Till when will the 56-inch chest be on "silent mode".

The rupee has plunged by more than 4 per cent in over a month.

The current account has faced additional pressure as India, like many emerging market economies, has also suffered due to rising US interest rates drawing investors away.

Traders remained cautious ahead of the Reserve Bank of India's policy meet scheduled later this week. India imports more than two-thirds of its oil needs.

He said: "You can not wish away the depreciation in the rupee if you are a current account deficit country".

Adding to the bullish mood, Federal Reserve chairman Jerome Powell said on Wednesday that the central bank may raise interest rates above an estimated "neutral" setting as the "remarkably positive" U.S. economy continues to grow.

DBS economist Radhika Rao expects a rate hike, along with the RBI shifting its stance to "hawkish" from "neutral". "Raising the repo rate will increase the real interest rates and help in attracting fresh foreign inflows which will help in containing the rupee".

Foreign funds sold shares worth a net of Rs 1,842 crore, while domestic institutional investors bought equities worth Rs 1,805 crore Monday, provisional data showed.Meanwhile, Brent crude oil near USD 85 a barrel, the rupee weakening by 43 paise to hit an all-time low of 73.34 against the dollar, and a mixed trend in other Asian markets also influenced trading sentiment here.

Rupee hits record low as fuel prices touch fresh highs