MUMBAI: The Indian rupee on Wednesday touched record lows for a second straight session on persisting concerns about rising inflation and weak growth, even as the central bank sold dollars to limit losses.
The partially convertible rupee ended at 78.9650 per dollar after touching a lifetime low of 78.97. The currency had closed at 78.77 on Tuesday.
The rupee has lost more than 6 percent against the dollar so far this year, and analysts believe it is likely to weaken further.
“The Indian Rupee has been adversely affected mainly by the FIIs pulling out funds from the equity market, rising crude prices, the deteriorating trade balance and dollar strengthening,” analysts at Emkay Wealth Management said in a note.
Indian shares fall
Indian shares fell on Wednesday to snap a four-day winning streak as worries over inflation resurfaced amid surging oil prices, while domestic explorers rose in late trade after the country approved a plan to give marketing freedom to sell crude.
The NSE Nifty 50 index closed 0.32 percent lower to 15,799.10 and the S&P BSE Sensex slipped 0.3 percent to 53,026.97.
India cement maker paying for Russian coal in Chinese yuan
Indian cement producer, UltraTech Cement, is importing a cargo of Russian coal and paying using Chinese yuan, according to an Indian customs document reviewed by Reuters, a rare payment method that traders say could become more common.
UltraTech is bringing in 157,000 tons of coal from Russian producer SUEK that loaded on the bulk carrier MV Mangas from the Russian Far East port of Vanino, the document showed. It cites an invoice dated June 5 that values the cargo at 172,652,900 yuan ($25.81 million).
Two trade sources familiar with the matter said the cargo’s sale was arranged by SUEK’s Dubai-based unit, adding that other companies have also placed orders for Russian coal using yuan payments.
The increasing use of the yuan to settle payments could help insulate Moscow from the effects of western sanctions imposed on Russia over its invasion of Ukraine and bolster Beijing’s push to further internationalize the currency and chip away at the dominance of the US dollar in global trade.
(With inputs from Reuters)