Indian rupee hits record low; may fall to 82 against dollar

The rupee closed at 79.94 per dollar, down 10 paise over its previous close of 79.84.



Reuters
Reuters
by

Issac John

Published: Mon 29 Aug 2022, 7:30 PM

Last updated: Mon 29 Aug 2022, 7:31 PM

The Indian rupee dropped to an all-time low of 80.15 versus the dollar or 21.8 against the dirham before settling at 79.9625 on Monday following a reported intervention by the Reserve Bank of India.

The rupee’s fall was subsequent to US Fed chair's comment that it would continue tightening its monetary policy until taming inflation to an expected level.

The rupee closed at 79.94 per dollar, down 10 paise over its previous close of 79.84. The currency had dropped to a record low 80.15 earlier in the day before the RBI sold the dollar to boost the rupee. On July 20, the rupee for the first time closed below the 80-mark at 80.05 against the greenback.

Indian equities, in line with other Asian gauges, slipped. The BSE Sensex ended 861.25 points or 1.46 per cent lower at 57,972.62, while the broader NSE Nifty declined 246.00 points or 1.4 per cent to 17,312.90.

Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs511 million, as per stock exchange data.

Sajith Kumar PK, CEO & MD, IBMC Financial Professionals Group, said it would be a very tough task for RBI to prevent the stock market from further falling. The regulator’s serious interventions may slow down the fall of the rupee. “However, considering the global market scenario, the currency may move further down to 82 levels.”

Anuj Choudhary, research analyst at Sharekhan by BNP Paribas, expects the 4upee to trade on a negative note on the strong dollar and weak global market sentiments. Concerns over global economic slowdown and inflation worries may also put pressure on Rupee, said Choudhary. Markets may also remain cautious ahead of India's GDP, manufacturing PMI and trade deficit data later this week.

Analysts said markets are looking for the next US interest rate hike during the next FED Meeting which is scheduled on September 20-21.

"The underlying tone for the rupee is weak based on global tightening phase," said Arnob Biswas, head of research at SMS Global Securities. He said it was possible that the RBI may not intervene a lot and could allow the rupee to fall in the face of broad dollar strength.

Meanwhile, the dollar index climbed to its highest level in 20 years, boosted by higher short-term US yields and risk aversion. — issacjohn@khaleejtimes.com


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