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Rupee Hits Lifetime Low, Closes At 81.62 Against US Dollar

The domestic unit opened at 81.47 against the greenback at the interbank foreign exchange and hit its weakest intraday level of 81.66. The currency traded in the range of 81.43-81.66 in Monday's session

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The Indian Rupee fell to its lifetime low on Monday as it closed at 81.62, depreciating 63 paise over its previous close of 80.99 against the US Dollar. The strengthening of the American currency and risk-averse sentiment among investors weighed on the local unit.

The domestic unit opened at 81.47 against the greenback at the interbank foreign exchange and hit its weakest intraday level of 81.66.

Forex traders said, the escalation of geopolitical risks due to conflict in Ukraine, a negative trend in domestic equities and significant foreign fund outflows sapped the investor appetite.

Rate hikes by the US Fed and Bank of England to contain inflation sapped risk appetite, traders added. 

Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd. said while speaking to the Businesswoeld, “Massive rally in the US Dollar Index and collapse in the British Pound triggered this up move. Additionally sharp rise in US and UK bond yields and sell-off in global equities contributed to the bearish sentiments in EM currencies."

“Over the rest of the week, we could see massive two-way volatility across currency pairs, including the USDINR, as the central bank fights it out with speculators. As we can expect a range of 80.70 and 82.10 on USDINR,” Banarjee added

Sriram Iyer, a Senior Research Analyst at Reliance Securities, said to a media house, the Indian rupee is likely to remain weaker as investors expect that the US Fed will continue to hike interest rates aggressively to cool inflation.

"Focus now shifts to RBI's meeting this week, with its decision due on Friday. We expect RBI to hike rates by 50 bps to cool stubbornly high inflation and prevent the currency from weakening further," Iyer added.

Meanwhile, the dollar index, which gauges the greenback's strength against major currencies, advanced 0.67 per cent to 113.94.

Global oil benchmark Brent crude futures fell 0.58 per cent to USD 85.65 per barrel.

Meanwhile, India’s forex reserves declined from USD 5.219 billion to USD 545.652 billion for the week ended September 16.


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