Rupee plunges 63 paise to close at new record low - Mumbai News
by IANS | Updated Sep 26, 2022
The rupee closed 63 paise down, at 81.62, against the US dollar on Monday. It had closed at 80.99 on the previous trading session.
"Another day of large gains for the dollar versus the rupee as it fell for the fourth day in a trot amid risk-averse sentiments and unprecedented strength in the greenback following Fed tightening and recession worries," said Dilip Parmar, Research Analyst, HDFC Securities.
During the morning trade, rupee had fallen to a record low of 81.55 against the US dollar on Monday after the sharp uptick in dollar index and yields US Treasury notes.
The 2-year US Treasury yield was at 4.2 per cent, its highest level since October 12, 2007.
By the closing of Indian market hours, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced to 114.58, before easing to 113.448.
The dollar's rally has risen sharply since last week after the US Federal Reserve increased rates by another 75 basis points and forecast more large-sized rate hikes to control high inflation print.
Meanwhile, the Brent crude oil prices were trading sharply lower at $85.08 per barrel. This was because of the global recession fear.
The Reserve Bank of India, as per reports, is selling dollars after the rupee hit all time low for the third straight sessions.
Due to the the RBI's market intervention to protect the weakening rupee and for the country's trade settlements, India's foreign exchange reserves have been steadily declining for the past few months. Another potential explanation for the rupee's decline is this depletion.
Later in the week, the RBI is set to raise rates too.
In the domestic equities front, Indian benchmark indices fell sharply on Monday, starting the week on a negative note, as investors remained cautious of slackening growth would push key economies into recession, dealers said.
At close, Sensex ended 953.70 points, or 1.64 per cent, down at 57,145.22, and Nifty closed 311.05 points, or 1.80 per cent, down at 17,016.30. A total of 2,925 shares have declined, 660 shares advanced, and 122 remained unchanged.
Maruti Suzuki, Tata Steel, ITC, Axis Bank, NTPC, and Bajaj Finance were major losers on the Sensex.
Among indices, Nifty Auto fell 3.81 per cent, Nifty Metal fell 4.13 per cent, BSE Commodities fell 3.32 per cent, and BSE Utilities fell 3.72 per cent.
Going forward, spot USDINR should retain a bullish bias and may head towards 82 as strength in the dollar index continues with surging bond yields.
"In the near term, spot USDINR is having resistance around 82 and support at 81.05," Parmar added.