Rupee plunges to new record low, breaches 73-level against dollar

The rupee plunged to a fresh record low on Wednesday, breaching the 73-mark for the first time ever.

The local currency opened 34 paise down at 73.25 against dollar.

Rising crude oil price impacted forex market sentiment. Oil prices were firm on Wednesday on expectations of a tighter market once US sanctions start targeting Iran's petroleum industry from next month, although a strong dollar and rising US crude supply curbed gains.


Brent crude oil futures were trading at $84.89 per barrel at 0222 GMT, up 9 cents from their last close.


Rupee tumbled 43 paise to end at a near two-week low of 72.91 against the US dollar on Monday amid a strengthening greenback and steady capital outflows.

According to Motilal Oswal Financial Services, “Rupee continued to remain under pressure and today is may hit fresh record low levels following sharp surge in global crude oil prices. Brent crude is now at four-year high levels on worries that global supplies will drop due to Washington’s sanctions on Iran. The US sanctions against Iran’s oil industry, which at its peak this year supplied nearly 3 per cent of the world’s daily consumption, are due to go into effect on November 4.”

On the domestic front, market participants will be keeping an eye on the RBI policy statement that due this week. Expectation is that the RBI could consider raising rates by 25 basis points and at the same time a hawkish tone could support the currency on lower levels.

“Today, USDINR pair is expected to open at 73.50(Oct) and quote in the range of 73.20 and 73.80,” Motilal Oswal said in a report.