Rupee vs Dollar: Rupee on Monday declined 43 paise to hit an all-time low of 81.52 against the US dollar in early trade, according to news PTI. The currency was weighed down by the strengthening of the American currency and risk-averse sentiment among investors weighed on the local unit.
Escalation of geopolitical risks due to conflict in Ukraine, a negative trend in domestic equities and significant foreign fund outflows sapped the investor appetite, forex traders said. At the interbank foreign exchange, the rupee opened at 81.47 against the greenback, then fell to 81.52, registering a fall of 43 paise over its previous closing.
On Friday, the rupee slumped 30 paise to close at a fresh lifetime low of 81.09 against the US dollar.
The Indian rupee is likely to remain weaker as investors expect that the US Fed will continue to hike interest rates aggressively to cool inflation, Sriram Iyer, Senior Research Analyst at Reliance Securities, said.
“Focus now shifts to RBI’s meeting this week, with its decision due on Friday. We expect RBI to hike rates by 50 bps to cool stubbornly high inflation and prevent the currency from weakening further,” Iyer said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.67 per cent to 113.94. Global oil benchmark Brent crude futures fell 0.58 per cent to USD 85.65 per barrel.
On the domestic equity market front, the 30-share BSE Sensex was trading 797.73 points or 1.37 per cent lower at 57,301.19 points while the broader NSE Nifty fell 260.80 points or 1.51 per cent to 17,066.55 points. Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs 2,899.68 crore, as per exchange data.
The RBI has been deploying the dollar reserves to defend the currency and has exhausted billions of dollars of currency assets in the fight. There have also been policy moves to attract more deposits from the diaspora through further incentives and other such attempts to stem the fall.
The country’s forex reserves declined USD 5.219 billion to USD 545.652 billion for the week ended September 16, a PTI report said.
With PTI Inputs