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Rupee hits all-time low against US dollar
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SME Times News Bureau | 09 May, 2022
The Indian rupee extended its losses and touched an all-time low of
77.42 against the US dollar in early trade on Monday.
The
Indian currency is weighed by the strength of the American currency in
the overseas market and continued foreign fund outflows. Further, rupee
slipped on surge in crude oil prices
Foreign institutional
investors were net sellers in the capital market on Friday, as they
offloaded shares worth Rs 5,517.08 crore, as per stock exchange data.
They have been selling equities constantly in the recent months.
Rupee
has been under-pressure after global central banks started normalising
policy and last week RBI too started raising key interest rates.
On Friday, the rupee had slumped 55 paise to close at 76.90 against the US dollar.
"Local
units are also hit by haven dollar flows, higher global rates due to
rising inflation and risk-off sentiments. Weakness in Chinese yuan,
which fell to its weakest level since November 2020, also weighing on
regional currencies," said Dilip Parmar, Retail Research Analyst at HDFC
Securities.
So far this year, foreign institutions have
withdrawn a total of nearly $19 billion from domestic equities and debt
markets, Parmar said.
Parmar sees near term depreciation in rupee
could continue for a few more days with lower side limited in the range
of 77.70 to 78. In the event of unwinding, the rupee could see levels
of 77 to 76.70.
According to Sugandha Sachdeva, VP-Commodity and
Currency Research at Religare Broking, the Indian rupee has plummeted to
record lows amid the deteriorating risk sentiments and the unrelenting
spree of overseas outflows from the domestic equities.
Besides,
an unabated rise in the dollar index towards a two-decade high, soaring
US treasury yields and crude prices, all of them have worked their way
to push the domestic currency on a downward trajectory, Sachdeva told
IANS.
"Markets are concerned about the spiralling inflation and
prospects of an aggressive tightening path that continues to threaten
the growth outlook, leading to safe-haven flows in the greenback."
Also,
hardening crude oil prices as the EU is moving ahead to impose an
embargo on Russian oil are roiling the sentiments, leading to worries
about the widening current account deficit and exacerbating the pressure
on the domestic currency.
Going ahead, as the Indian rupee has
breached the previous all-time lows of the 77.14-mark, it seems poised
to witness further depreciation towards the 78-mark in the near term.
Sachdeva, however, anticipates that RBI will intervene around the 78-mark to curb excessive depreciation in the Indian currency.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
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78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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