The rupee extended its losses and fell to an all-time low of 77.42 versus the US dollar in early trading on Monday, pushed down by the strength of the US dollar in the international market, foreign money outflows, and a decline in local stocks, according to the Reserve Bank of India.
The rupee began at 77.17 versus the dollar, but quickly lost ground to quote at 77.42, representing a loss of 52 paise from the previous close and a break through the previous all-time low of 76.98, which was reached in March this year. Friday, it lost 55 paise to end the day at 76.90 versus the United States Dollar, according to Bloomberg.
The US dollar has continued to rise as a result of risk aversion in global markets and a rise in the yield on US government bonds. The dollar index, which measures the strength of the greenback against a basket of six currencies, was trading 0.35 percent higher at 104.02 on Tuesday, as increasing US yields and concerns about higher interest rates weighed on the greenback’s strength.
“The rupee is projected to weaken today as the dollar strengthens and global market sentiment becomes gloomier.” Investors are worried about rising inflation, monetary policy tightening in key nations across the world, an economic slowdown, and the escalation of geopolitical tensions, which has weighed on market sentiment. Furthermore, market investors are concerned that increasing crude oil prices may have a negative impact on India’s trade and current account,” according to the brokerage ICICI Securities.
The rupee has continued to fall despite a surprise rate increase by the Reserve Bank of India, which comes as the country’s current-account imbalance continues to expand. The Reserve Bank of India has been utilising its foreign exchange reserves to arrest the decline in the value of the rupee. According to the most recent figures, the reserve pile has fallen below $600 billion for the first time in a year for the first time.
Following a sell-off in global markets and a decrease in shares of index heavyweight Reliance Industries, equity benchmarks continued to take a beating on Monday, with the Sensex plunging over 800 points in early trading (RIL).
Published by: Ifa Zamzami
