The rupee weakened further to close at a new low of 77.44

The rupee weakened further to close at a new low of 77.44

Rupee plunges 54 paise to close at the lowest level ever at 77.44 / USD

The rupee weakened further on Monday to close at a new low of 77.44 after breaking the previous record of 77.05 earlier in the session as the dollar rose across markets.

PTI reported that the Indian currency fell 54 paise to a fresh record low of 77.44, from 76.90 against the US dollar.

In the interbank foreign exchange market, the rupee opened lower at 77.1[ads1]7 against the dollar and finally settled for the day at 77.50, down 60 paise from the previous close. During the trading session, the rupee reached a lifespan of 77.52.

Forex traders said risk appetite has weakened due to growing concerns about inflation that could trigger more aggressive rate hikes by global central banks.

Fly-to-safety traders drove this dollar rise as investors continued to be intimidated by rising inflation, higher interest rates and concerns about slowing economic growth.

The dollar climbed to its highest levels in two decades, driven by higher government interest rates on rising inflation and the expected aggressive rate hike from the US Federal Reserve.

In addition, a tighter shutdown in China, Europe’s plan to ban Russian oil in response to the war against Ukraine, in its third month, and the brake risk of economic growth from rising commodity prices have increased the attractiveness of the greenback.

In fact, against a basket of major currencies, the dollar peaked at 104.19 for the first time since July 2002, prolonging its rise of almost 9 percent this year.

“It is difficult to go against the current momentum for higher returns and US dollar strength in the short term,” Mizuho strategists noted.

Sustained capital outflows have also driven the fall of the rupee. In May’s first four trading sessions, foreign institutional investors (FIIs) remained net sellers of Indian stocks for seven months in a row until April, pulling out over Rs 6400 crore.

While crude oil prices fell above 1.5 percent on Monday, Brent futures were still trading above $ 110 a barrel.

The energy-sensitive rupee has taken a beating from the rise in crude oil prices – which has largely remained above $ 100 since the end of February, as the country is dependent on imports for 85 percent of oil demand.

Domestic stocks fell on Monday, prolonging their weak performance by following investors’ gloomy mood and weighing the rupee after the latest stock market data showed that FIIs loaded of shares worth Rs 5,517.08 crore on Friday, trends pointing to more of the same this the week.

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