Rupee slumps to all-time new low, touches 77.20 per dollar

By Team Newsable | First Published May 9, 2022, 9:54 AM IST

The rupee dropped as much as 0.3% to 77.1825 a dollar on Monday, slipping past the previous record low 76.9812 touched in March.

The rupee hit all-time lows early on Monday, trading over 77.20 per dollar, spurred by investors' choice for protection as Chinese lockdowns, conflict on the outskirts of Europe, and fear of increased interest rates jolted markets.

While the Indian rupee closed close to its all-time lows of 77.05 per dollar on Friday, it fell dramatically today and was last trading around 77.20 per dollar, according to the most recent Bloomberg report. The rupee dropped as much as 0.3% to 77.1825 a dollar on Monday, slipping past the previous record low 76.9812 touched in March.

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The dollar rose to near two-decade highs, rising for the fifth week in a row after the Federal Reserve raised its benchmark funds rate by 50 basis points and solid employment data on Friday bolstered expectations on further hefty rises.

Due to high crude oil prices, India's trade and fiscal deficits are expected to rise, and will put increasing pressure on the Indian currency.

The US dollar index, which measures the currency against 6 major currencies, was at 103.98 last, stronger than 103.79 at previous close. Meanwhile, yield on the 10-year US Treasury yield jumped to 3.14 per cent, 0.1 per cent higher than previous close.

Net capital outflows have not benefited the Indian rupee, with foreign investors withdrawing over 6,400 crore from the Indian equities market in the first four trading days of May and being net sellers over the next seven months, till April 2022. While the RBI raised key interest rates in an emergency meeting last week, runaway inflation risks are mounting even as concerns about economic growth activities remain.

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