The value of the Indian Rupee (INR) has recorded a low price and as per market data, it is a record low value it has exhibited.
INR Value Declined on Friday
On Friday, the trading value of the Indian Rupee faced a record-low drop. A major factor that is dragging the value of the INR in the lower direction is the constant rise in oil prices.
Another major is the corporate demand that is constantly rising for the United States dollar (USD). Then there are growing fears due to the upcoming data release by the Feds for the non-farm payrolls (NFP).
The investors seem to be highly concerned and vigilant due to the upcoming NFP data the Feds would release for the month of September.
If the data is no good, then the Feds will have to resort to continuing with their interest rate hikes. This would continue increasing the value of the USD, thus, the value of the INR would continue declining.
There is no positive factor that is big enough to overcome the negative impact of the above-mentioned negative factors. Therefore, a rise in the trading price of the INR is cannot be expected any time soon.
INR’s 0.4% Decline
On Friday, the traders saw the trading price of the INR fall against the USD. Its value dipped by 0.4% versus the USD and hit a low of 82.356 against the greenback.
According to the predictions, the overall decline the INR is to witness by the end of the running week is 0.8%. No matter the decline, it would be the fourth consecutive week where the value of the INR has witnessed a demise.
Oil Prices are Constantly Rising
Among all the factors, it is the rise in oil prices that has led to forming a major downtrend for the INR. In the running week, the INR has taken a huge fall due to the oil prices that have started increasing.
India is the third largest country in the world when it comes to importing crude oil. Despite being extremely rich in population with the second-largest population in the world, India is not at all rich in oil.
With very less oil resources, India is mainly dependent on imported oil which accounts for 80% of the country’s total consumption. Even a slight change in the oil prices causes the price of the INR to experience a great impact.
Upcoming Surge in Oil Prices
According to many market experts, India is set to take a major fall in terms of its INR, and the main driver behind that would be the oil prices.
OPEC+ has decided that from November, they would reduce the production of crude oil by 2 million barrels a day. This would push the oil prices to somewhere around $100 per barrel.
At the time of writing, the crude oil prices are around $80 per barrel but due to the reduction in oil production, its value may rise to $100. This would eventually impact the price of the INR in a negative manner.