Indian Rupee falls to record low against Omani rial

MUSCAT: The Indian rupee fell to a fresh record low versus the US dollar on Tuesday bringing cheers to non-resident Indians.

According to local money exchanges, the rupee touched 204.10 against one Omani rial as the Indian benchmark was trading at a record low of 78.597 per US dollar in the intra day trade on Tuesday.

Following the dollar strength, Pakistan rupee fetched 530 while the Bangladeshi takka received 242 against one Omani rial.

“It’s imminent that the rupee will cross the 79 mark per US dollar”, said Lijo John, General Manager, Modern Exchange.

He told Observer that the aggressive rate hikes by the Federal Reserve caused the dollar to strengthen globally.

The rupee has depreciated more than five per cent versus the US dollar so far in 2022 as higher US interest rates, the surge in oil prices and record overseas investment outflows from equities have hurt the domestic currency.

Citing other reason for the rupees’ fall, Amit Talukder, General Manager, Global Money Exchange told Observer that traders in India exited short dollar positions and importers rushed to cover their positions.

“The rupee and Indian equities were under pressure today by the uptick in crude oil prices amid persistent supply issues”, he said.

In absence of any major data points, markets is seeking cues from Brent (around $116 barrel) and Dollar Index (around 103.71) moving up on expectations of further Western sanctions on Russian oil supplies and supply disruptions in Libya, Amit said.

The Reserve Bank of India has intervened heavily in the foreign exchange market since the Ukraine war broke out in February to curb excessive volatility in the rupee.

However, the rupee continued its downward trend. The weakness in the rupee’s value against the US dollar will be automatically reflected in its exchange rate with the Omani rial as it is pegged to the dollar.

According to Lijo, the rupee’s all-time plunge offers non-resident Indians better remittance rate against Omani rial.

“It will likely continue the downward trend and may hit 80 against the dollar in the near future as further US Fed rate hikes are expected in July and September,” he said, adding, “it’s salary time and Indians in Oman can fetch more money on their remittances”.