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Rupee plunges 30 paise, hits all-time low of 77.56 against US dollar

By Priyanka Verma 
Updated Date

New Delhi: The rupee slipped to a record low for the second time this week. The Indian rupee on Thursday, May 12, plunged 30 paise to hit an all-time low of 77.57 against the U.S. dollar amid a broader decline in Asian currencies and a lacklustre trend in the domestic equity markets. It also sparked a fresh tumble in global equities. Indian markets were down over 1.8% today.

Also Read :- Indian rupee drops all-time low for the 4th consecutive sessions, the price of rupee reached near 80 against the dollar

“Rupee is expected to remain under pressure today amid risk aversion in the global markets and strong dollar. Further, rupee may slip on persistent FII outflows and a surge in crude oil prices. Additionally, market participants will remain vigilant ahead of CPI data from country which is likely to show that inflation remained above RBI comfort zone for 4th consecutive month. USD-INR (May) is expected to trade in a range of 77.25-77.75,” ICICI Securities said in a note.

“The US CPI rose 0.3% last month versus the 1.2% month-to-month surge in the CPI in March, while on an annual basis, CPI climbed 8.3%, higher than the 8.1% estimate but below 8.5% the prior month. Meanwhile, St. Louis Fed President James Bullard said the U.S. inflation was broader and more persistent and that he would like to see the policy rate at 3.5% at year-end,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.

The Iyer also said, “The Fed rate is currently at 0.75%-1% and the U.S. central bank is scheduled to meet five more times this year. If the Fed rate were to get near to 3.5%, it would mean 50-bps increases at each of the meetings.”

Jateen Trivedi, Senior Research Analyst at LKP Securities, says that rupee is likely to be under pressure till the time it trades below 76.50 which is 20-dma resistance on the closing basis.

Also Read :- Indian rupee corsses 78 per us dollar for the 1st time ever, hits record low

Though crude oil dropped more than 1% today, it remained at elevated levels of $106.26 a barrel. India is the world’s third-largest importer and consumer of oil, and a rise in crude prices tends to push the country’s trade and current account deficit higher.

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