The rupee hit a new all-time low against the dollar for the fourth straight trading session as the currency ended at 77.73/$, amid continued risk aversion among investors over the prospects of the US Fed tightening interest rate policy. Intervention from the Reserve Bank of India (RBI) helped the currency to cap its losses.
The rupee opened weaker at 77.70/$ as compared to Wednesday’s close of 77.58/$ and traded in a narrow range amid intervention from the central bank. After touching the day’s low of 77.74/$, the currency closed the day at 77.73/$, weakening by 15 paisa than its previous close.
“The USDINR pair ended slightly up tracking a sell-off from domestic indices as the global risk-off mood, along with the prospects for a more aggressive policy tightening by the Fed supported safe-haven dollar demand,” IFA Global said in a note . “The RBI’s continued intervention today to protect the level of 77.70 has capped any major gains in the pair,” IFA Global said. The rupee has lost 2.7 per cent value since the Russia-Ukraine war broke out on February 24.
“Overall, the outlook on rupee doesn’t seem promising as factors such as a fall in equities, volatile commodity prices, uncertainty over growth, hawkish Fed, and a stronger USD suggest a depreciating bias. Hence, we expect the rupee to steadily depreciate toward 78.00-78.20 over the short term to medium term,” said Amit Pabari, managing director, CR Forex.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard,
Digital Editor