New Delhi: On Monday, amid a strengthening dollar and rising global oil prices, the Rupee crossed the 78 mark against the US dollar for the first time. The local currency began the day 30 paise lower at 78.14 per US dollar on Monday against the close of 77.84 on Friday.
At the interbank foreign exchange, the rupee opened at 78.20 against the American dollar, then lost ground to quote at 78.29 — its record low level, registering a fall of 36 paise from the last close.Forex traders said weak Asian currencies, a lacklustre trend in domestic equities and persistent foreign capital outflows weighed on investor sentiments.
On Friday, the rupee tumbled 19 paise to close at a fresh lifetime low of 77.93 against the US dollar. The dollar climbed over 0.4 per cent on Monday and hit a 20-year peak of 135 yen, edging closer to the 2002 high of 135.20 yen.
Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors said, “Weak global sentiments and weak Asian and European currencies have allowed the rupee to open below 78 after RBI ensured it did not cross 77.70. Have to watch the RBI as to how it behaves in the next few days.”
In the previous session, the rupee had tumbled to its previous all-time low of 77.93 against the dollar on aggressive Fed tightening expectations as US inflation jumped to a more than four-decade high.
CR Forex Advisors MD Amit Pabari said,“Overall, it is historically seen, that whenever the rupee breaks its all-time high, it typically moves by 1 to 1.5 rupee.” “However, this time as the key level of 77.80 is broken in the USDINR pair, RBI might not allow the pair to move higher sharply and we expect the rupee to trade between 77.80 -78.50 in the short to medium term.”