Mumbai: The rupee weakened by 44 paise to close at 79.16 from Tuesday’s close of 78.72.
Dealers said the rupee weakened on worries of a widening trade deficit. There was also some wholesale demand for dollars, which dealers assumed would be from oil companies or for government defense purchases.
The trade deficit widened to a record $31 billion in July 2022, with exports falling 12.2% month-on-month while imports were flat. “The July print of the trade deficit probably reflects a peak in the monthly deficit run rate, as most of the global commodity complex has peaked and improved significantly. In addition, a dramatic increase in the oil deficit is unlikely to last with the easing of export taxes and a possible reduction in domestic demand due to the passing of the peak summer months. MK Global Finance A leading economist Madhavi Arora.
United Financial Consultants Managing Partner K. N. Dey said, “After seeing the rupee at 80, importers scrambled to cover their positions and rushed to buy dollars following Tuesday’s appreciation. Volatility is at both ends of the market. The next event that everyone is looking forward to is RBI’s Monetary Policy Committee and expectations are that hikes will remain at the low end. ”