The rupee at the interbank foreign exchange opened at 82.68 against the US dollar, then slipped further to 82.69
The rupee depreciated 39 paise to an all-time low of 82.69 against the US dollar in early trade on Monday amid gains in crude oil prices and weakness in the domestic equity markets. At the interbank foreign exchange, the rupee opened at 82.68 against the greenback, then slipped further to 82.69, registering a fall of 39 paise over its previous close.
The rupee had declined by 13 paise on Friday to hit a record life-time closing low of 82.30 against the US dollar.
Rahul Kalantri, vice-president (commodities) of Mehta Equities, said, “The dollar index showed a strong comeback from previous week lows and crossed the 112.50 mark again after upbeat US non-farm employment data. The US 10-year bond yields also jumped and crossed the level of 2.88 per cent last week. Weakness in the global equity markets and escalating Russia-Ukraine tensions also supported safe-haven buying of the dollar… We expect the rupee to remain weak this week and could test 83.00-83.50 levels.”
He added that the rupee slipped to record lows last week against the US dollar after the World Bank reduced the Indian growth outlook from 7.5 per cent to 6.5 per cent for the year 2022-23. The rupee also plunged amid gains in crude oil prices and weakness in the domestic equity markets.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.02 per cent up at 112.81. Global oil benchmark Brent crude futures stood at $97.07 per barrel.
On the domestic equity market front, the 30-share BSE Sensex was trading 646.25 points or 1.11 per cent lower at 57,545.04, while the broader NSE Nifty fell 192.10 points or 1.11 per cent to 17,122.55. Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs 2,250.77 crore, as per exchange data.
IFA Global Research Academy said in a note said, “The double whammy of higher US rates and higher crude prices is back to haunt the rupee. While the RBI was able to defend the rupee successfully through the last round of simultaneous stress on current and capital accounts by spending its reserves, this time around things are likely to be different.”
India’s forex reserves dropped by $4.854 billion to $532.664 billion as on September 30, the Reserve Bank of India said on Friday. The reserves, which have been dipping as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments, had declined by over $8.134 billion to $537.518 billion in the previous reporting week.
“After having exhausted a significant portion of its reserves, RBI seems concerned about the burn rate of reserves and appears to be spending them very judiciously. This has resulted in the rupee adjusting and aligning itself with fundamentals and its peer group currencies,” IFA Global Research Academy’s note said.
(With Inputs From PTI)
