1 min read.Updated: 09 May 2022, 11:34 AM ISTLivemint
Rupee opened at 77.17 against the dollar, and fell further to its record low at 77.42 in early deals
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The Indian currency extended its losses and touched an all-time low of 77.42 against the US dollar in Monday's early trade weighed down by the strength of US dollar in the overseas market, foreign fund outflows and fall in domestic equities.
Rupee opened at 77.17 against the dollar, then lost ground to quote at 77.42, registering a fall of 52 paise from the last close, and slipping past the previous all-time low of 76.98 touched in March. It had slumped 55 paise to close at 76.90 against the American currency on Friday.
US dollar continued its rally amid risk aversion in global markets and surge in US treasury yields. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.35 per cent higher at 104.02, tracking rising US yields and fears about higher interest rates.
“The rupee is expected to depreciate today amid firm dollar and pessimistic global market sentiments. Market sentiments were hurt as investors are concerned over surging inflation, monetary policy tightening across major countries in the globe, economic slowdown and escalating geopolitical tensions. Moreover, market participants fear that rising crude oil prices will hurt India’s trade and current account," said brokerage ICICI Securities.
A surprise rate hike by the RBI has not been able to stem the rupee’s decline as a widening current-account deficit amplifies concerns. The Reserve Bank of India has been using its forex reserves to stem the currency’s losses. Latest data showed that the reserve pile had dropped below $600 billion for the first time in a year.
Equity benchmarks continued to face heavy drubbing on Monday, with the Sensex tumbling about 800 points in early trade, following a sell-off in global markets and decline in shares of index major Reliance Industries (RIL).