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Rupee slides to all-time low of 82.30 against dollar

Source: PTI
October 07, 2022 21:29 IST
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The rupee depreciated further by 13 paise to hit a new life-time closing low of 82.30 against the US dollar on Friday as a firm American currency and risk-averse sentiment among investors weighed on the local unit.

Rupee

Illustration: Uttam Ghosh/Rediff.com

Moreover, a negative trend in domestic equities and elevated crude oil prices sapped investor appetite, forex traders said.

At the interbank foreign exchange market, the local currency opened at 82.19, then fell further to 82.43. It finally settled at an all-time low of 82.30 against the American currency, registering a decline of 13 paise over its previous close.

 

On Thursday, the Indian currency for the first time closed below the 82 level against the greenback.

It plunged 55 paise to close at a record low of 82.17 against the US currency.

In this week, the rupee depreciated 90 paise or 1.11 per cent against the dollar due to rising crude oil prices and growing expectations of aggressive rate hikes by the US Fed.

"Rupee fell to fresh all-time lows as the dollar continued to strengthen against its major crosses.

"Rally in global crude oil prices also weighed on the overall market sentiment," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

OPEC+ group of nations announced its largest supply cut since 2020 ahead of European Union embargoes on Russian energy.

"Dollar strengthened ahead of the important non-farm payrolls number that will be released today. Better-than-expected data could extend gains for the dollar," Somaiya said.

According to Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas, the Indian rupee depreciated as India's FY23 GDP has  been revised lower by World Bank to 6.5 per cent from its previous estimates of 7.5 per cent warning of spillovers from global monetary tightening and Russia's invasion of Ukraine.

"Rupee touched a record low on weak domestic markets and a strong US dollar.

"Dollar index is currently trading at 112 levels. Surge in crude oil prices also put downside pressure on Rupee. However, FII inflows cushioned the downside," Choudhary said.

Choudhary further noted that rupee is likely to trade with a negative bias on risk aversion in the global market and overall strength in the US dollar.

However, inflows by foreign investors may support rupee at lower levels.

Markets may also take cues from non-farm payrolls data from the US which is expected to add jobs but at a slower pace compared to the previous month.

"USD/INR spot price is expected to trade in a range of Rs 81.50 to Rs 83 in the next couple of sessions," Choudhary said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, declined 0.19 per cent to 112.04.

Global oil benchmark Brent crude futures surged 0.82 per cent to USD 95.19 per barrel after oil cartel OPEC decided to cut production in view of weakening global demand.

On the domestic equity market front, the 30-share BSE Sensex dropped 30.81 points or 0.05 per cent to end at 58,191.29, while the broader NSE Nifty fell 17.15 points or 0.1 per cent to 17,314.65.

Foreign institutional investors were net buyers in the capital market on Friday as they purchased shares worth Rs 545.25 crore, as per exchange data.

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