Where Rupee at Record Low? ; Hits 80 per US Dollar For First Time Ever.

The Indian rupee on Tuesday breached the psychologically significant level of 80 against the US dollar for the first time. The local currency opened the day at 79.98 per US dollar against the previous close of 79.97. Then, it immediately hit a record low of 80.0175 in early trade. The rising trade deficit, the continuous outflow of foreign portfolio investors and rising crude oil prices have kept the rupee under pressure for some time now. This year, it has fallen nearly 7% against the US dollar. The Indian rupee has declined by about 25 per cent since December 31, 2014, finance minister Nirmala Sitharaman said in the Lok Sabha on July 18. The finance minister pointed out that global factors such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions are the main reasons behind the fall of the rupee. So far, foreign

portfolio investors have withdrawn about $14 billion from Indian equity markets in 2022–23, Sitharaman said. The outflow of foreign portfolio capital is a major reason for the depreciation of the Indian rupee, she added.

India’s merchandise trade deficit widened to a record $26.18 billion in June. The trade deficit stood at $24.3 billion in May. A record-high trade deficit also added pressure on the domestic unit.

The US dollar hovered on Tuesday just above a one-week low reached overnight versus major peers. The dollar index, which gauges the greenback against six counterparts, was flat at 107.47.

The Rupee's Outlook for Investors

above 79.95 has negated the bear move, rendering the overall trend neutral, awaiting a directional push. "The 79.95 region will continue to be key, with 79.85-80.15 being the narrow band in which USD-INR is expected to be in today," said Anand James, chief market strategist at Geojit Financial Services.

The Indian rupee is expected to open flat to weaker this Tuesday morning, weighed down by outflows and high oil prices. Lack of intervention from the RBI could also weigh on sentiments. So, the rupee could open around 79.99-80.00 per dollar this Tuesday morning from 79.97/dollar closed in the previous session. "The USD-INR pair range for the pair this Tuesday’s session is 79.75-80.12," said Sriram Iyer, Senior Research Analyst at Reliance Securities.

"The rupee has finally breached the 80-mark, a key psychological level. The rupee is expected to further slide due to the current severe rate hike by the US Fed, relentless selling by foreign investors, and the rising demand for the USD due to its safe haven status. Nevertheless, the RBI is aware of the falling rupee quagmire and could take actions to curb the further depreciation. Therefore, we expect further downside to 81 to 81.5 levels, "Punit Patni, equity research analyst, Swastika Investmart."

Due to the economic pressure of World War II, the use of silver for coinage was dropped during the 1940s in most of the world and in India too. The newly independent countries went in for their own fiat currencies. For ease of trade, Saudi

Arabia adopted a new riyal in 1935, similar to the INR in weight and silver content. The Indian rupee was used as a currency by its neighbors, the Trucial States (now the United Arab Emirates), Oman, Kuwait, Bahrain, and Yemen. These countries continued to use the rupee as currency even after 1947; the Reserve Bank of India used to print a special banknote, the Gulf Rupee (see picture), for use in these countries. After the multiple rupee devaluations of the 1960s, these countries dropped the rupee and adopted their own currencies.