New Delhi: On Thursday, The Indian rupee hit an all-time low of 77.81 against US dollar. This comes amid sustained foreign capital outflows and elevated global crude oil prices. It had recorded the previous all-time low of 77.7975 on may 17.On Wednesday, the rupee recovered to close 10 paise higher at 77.68 against the American currency.
MD or CR Forex Advisors Amit Pabari said “Sword is still hanging on rupee amid persistent FII selling from emerging markets leading to Asian currencies weakening, elevated oil prices, and revised upward inflationary pressure for coming quarters. However, the only ray of hope for rupee presently will remain RBI who has actively and aggressively participated to protect rupee from the heat so far.”
On Wednesday, The Reserve Bank of India (RBI) raised the key interest rate by 50 basis points, the second increase in five weeks. Foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth ₹2,484.25 crore, as per stock exchange data.
Global oil benchmark Brent crude futures rose 0.26 per cent to USD 123.90 per barrel. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.01 per cent lower at 102.52.
Rupee opened on a bearish note as crude oil neared USD 125 per barrel, Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, said. “Only RBI is supporting the rupee while the flows have totally dried out. Foreign Portfolio Investors (FPIs) continue the sell-mode for equities and buy-mode for US dollar,” Bhansali said.
Moreover, Asian currencies are trading on a weak note, Bhansali said, adding that there is “no effect of a rate hike by RBI on Wednesday on the rupee as buyers of the dollar are in abundance.” “We expect the dollar index to remain volatile in today’ session ahead of the ECB monetary policy meetings and could hold its support level of 101.85 on a closing basis,” VP Commodities, Mehta Equities Ltd, Rahul Kalantri said.