Rupee falls 19 paise to close at lifetime low of 80.98 against US dollar

The rupee on Friday hit a record low crossing Rs 81 mark against the US dollar, and closed 19 paise lower than Thursday tp close at 80.98 against the US dollar.

It had touched 81.23 during the day while being traded at the interbank foreign exchange market, a day after it slumped by 83 paise.

This is the third straight session of loss for the Indian currency against the American one during which it has lost 124 paise in value.

Forex traders said the escalation of geopolitical risk in Ukraine and rate hikes by the US Fed and Bank of England in a bid to contain inflation sapped risk appetite.

Further, the strength of the American currency in the overseas market, a negative trend in domestic equities, and risk-off mood amid escalation of geopolitical risk in Ukraine weighed on the local unit.

“Rupee fell to fresh all-time lows against the US dollar after the Fed raised rates earlier this week. Most of the currencies are under pressure as the dollar continues to strengthen,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Somaiya further noted that volatility in Yen remained elevated after the Bank of Japan intervened to curb sharp depreciation. The Bank of England raised rates by 50 bps.
“We expect the USD-INR (Spot) to trade sideways and quote in the range of 80.40 and 81.20,” Somaiya said.

On the domestic equity market front, the 30-share BSE Sensex dropped 1,020.80 points or 1.73 per cent to end at 58,098.92, while the broader NSE Nifty fell 302.45 points or 1.72 per cent to 17,327.35.

Also read: Rupee tanks 90 paise to close at all-time low of 80.86 against US dollar

Foreign institutional investors were net sellers in the capital market on Thursday as they offloaded shares worth Rs 2,509.55 crore, as per exchange data.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.72 per cent to 112.15.

Global oil benchmark Brent crude futures fell 1.98 per cent to USD 88.67 per barrel.
Meanwhile, voting began on Friday in Moscow-held regions of Ukraine on referendums to become part of Russia.

The referendums follow Russian President Vladimir Putin’s order of a partial mobilisation, which could add about 300,000 Russian troops to the fight. The balloting will continue for five days through Tuesday.

The referendums, which have been widely denounced by Ukraine and the West as sham without any legal force, are seen as a step toward annexing the territories by Russia.

(With agencies inputs)