Rupee crashes to all-time low of 77.44 on currency outflows, US yields rise

Mumbai: Extending its losses for a second day, the rupee fell 54 paise on Monday to close at a record high of 77.44 against the US dollar, under pressure from US currency strength overseas and outflows relentless foreign funds.

Forex traders said risk appetite had weakened on rising bond yields in the United States and growing concerns over inflation that could trigger more aggressive rate hikes by global central banks. .

In the interbank foreign exchange market, the rupiah opened lower at 77.17 against the greenback, and eventually stabilized for the day at 77.44, down 54 paise from its previous close. During the trading session, the rupee touched its all-time low of 77.52.

On Friday, the rupee fell 55 paise to close at 76.90.

Over the past two trading sessions, the rupee has lost 109 paise against the greenback.

“The Indian rupee plunged to record lows, tracking weakness in Asian peers amid a stronger dollar index and rising US Treasury yields,” Royce Vargheese Joseph said. – research analyst – currency and energy, stocks and stockbrokers Anand Rathi.

Equity markets sold off sharply as real rates in the U.S. turned positive and investors became risk averse pricing in the need for a higher rate hike to keep inflation in check going forward , said Joseph.

Joseph further stated that “high crude prices and rising domestic inflation, well above RBI’s upper range, may prompt FII to sell more domestic securities. Meanwhile, the off-cycle meeting from RBI on May 4 did little to strengthen the rupee. Going forward, we may see the rupee weaken towards the 77.8 levels.”

The dollar index, which measures the strength of the greenback against a basket of six currencies, traded up 0.33% to 104, following the rise in US yields amid fears over interest rates. higher interest.

“The Rupee fell to fresh all-time lows on Monday as the Dollar rose broadly against its major crosses. Last week’s central bank policy action led to increased volatility in most currencies. general market sentiment,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Somaiya further said that this week the focus will be on inflation data from India and the United States.

“We expect USDINR (Spot) to trade with a positive bias and range between 77.20 and 77.80.”

According to Jateen Trivedi, Senior Research Analyst at LKP Securities, “Dollar staying above $104 indicates aggressive FII exit from emerging markets, higher Vix indicates no trend is sustainable and due to “Higher inflation, aggressive central bank liquidity squeeze is putting pressure on the rupee. Prices have also been rising for the past month, making the rupee even weaker.”

“I see the rupiah continuing its descent as the rising dollar is a major price risk. Relief on the rupiah front can only be seen if the dollar index cools down,” Trivedi said.

Brent futures, the global oil benchmark, fell 1.68% to $110.50 a barrel.

The 30-stock BSE Sensex ended 364.91 points or 0.67% lower at 54,470.67, while the broader NSE Nifty fell 109.40 points or 0.67% at 16,301.85 .

Foreign institutional investors remained net sellers in the capital market on Monday as they sold shares worth Rs 3,361.80 crore, according to stock market data.


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