Rupee touches all-time low of 80.13 against US dollar

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IANS | 29 Aug, 2022
The rupee ended 10 paise lower at 79.96 against the US dollar after touching an all-time low of 80.13 in early morning trade on Monday.

The rupee breached the 80-to-a-dollar mark to hit a fresh record low of 80.13 today after Federal Reserve Chair Jerome Powell signalled interest rates would be kept higher for longer to bring down soaring inflation.

The rupee weakened to a low of 80.14 against the US dollar in the first few minutes of trade on Monday as the US dollar index strengthened well past the 109-mark.

The previous lifetime low for the rupee was 80.06 per dollar on July 19.

"The Rupee broadly is in downtrend as FED's chair speech at Jackson hole turned positive for the dollar which touched 19-year high again. RBI lacks intervention as actions slows down the pace of fall in rupee rather than temporary pull back as RBI needs to maintain foreign reserves. India's reserves are at $580,252 billion, down by $27.05 billion from March-end 2022," said Jateen Trivedi, VP Research Analyst at LKP Securities.

US Fed Chair Powell at the Jackson Hole Economic Symposium made it clear that the central bank's fight against inflation was not over and Fed was likely to keep raising interest rates to stamp out inflation.

"Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy," Powell said.

The dollar index, which gauges the strength of greenback against the basket of six major currencies, was at 108.845.

"As the dollar index has shown strength from 106$ to 109 which will hold the rupee's drop in majority. Crude back again above 100$ also guides rupee weakness to continue," Trivedi added.

Brent crude oil prices were trading at $101.46 per barrel by the closing of Indian market hours.

On the equities front, Sensex ended 861.25 points or 1.46 per cent down at 57,972.62, and Nifty ended 246.00 points or 1.40 per cent lower at 17,312.90. About 1,455 shares advanced, 2,045 shares declined while 203 remained unchanged on Monday.