Monday saw a fresh low for the rupee versus the US dollar as the dollar’s strength remained uninterrupted amid signs that the Federal Reserve will continue its tightening cycle.
The rush by importers to buy US dollars exacerbated the rupee’s depreciation. At 10.10 IST, the rupee was trading at 81.50 per dollar after hitting a fresh intraday low of 81.56. On Friday, it had a final value of $80.99 per US dollar. The rupee had hit an intraday low of 81.26 to the dollar.
A combination of a hawkish Federal Reserve and risk aversion brought on by the conflict in Ukraine led foreign investors to the US dollar, which soared to a new 20-year high of 114.50 early on Monday. In the afternoon on Friday, the dollar index was at 112.12.
The Federal Reserve increased rates by 75 basis points last week, bringing the total number of rate increases in 2022 to 300 bps. The Fed also hinted that its tightening cycle would be longer than previously anticipated. The rupee suffered from a steep decrease in local stocks, according to traders. At 10:10 am, the NSE Nifty and the BSE Sensex were both trading 1.7% and 1.5% down, respectively.
Dealers said that the Reserve Bank of India has not yet made a substantial dollar-related intervention in the foreign currency market. The central bank is anticipated to act in this manner to stop the local currency from depreciating past the 81.50 per dollar level.
To protect the rupee from undue volatility, the RBI has drastically depleted its foreign exchange reserves since late February. Dealers anticipate the central bank to scale back its interventions given that reserves are now at their lowest point in nearly two years.
IIFL Customer Care Number 
IIFL Capital Services Support WhatsApp Number
