Rupee falls 20 paise to close at record low of 78.13 against US dollar

Rupee falls 20 paise to close at record low of 78.13 against US dollar

MUMBAI: The rupee plunged 20 paise to close at an all-time low of 78.13 against the US dollar on Monday, as a lackluster trend in domestic equities and stronger greenback overseas weighed on investor sentiments. Forex traders said weak Asian currencies and persistent foreign capital outflows were the other major factors that dragged the local unit down.
At the interbank foreign exchange market, the local currency opened at 78.20 and witnessed an intra-day high of 78.02 and a low of 78.29 against the US dollar.
The local unit finally settled at its all-time low of 78.13, down 20 paise over its previous close.
On Friday, the rupee had tumbled 19 paise to close at a record low of 77.93 against the US dollar.
“The Indian rupee, taking cues from weaker regional currencies plummeted to a life low. The dollar extended gains on Monday as US treasury yields rose after Friday’s inflation shock raised speculation of a more aggressive rate hike from the Federal Reserve this Wednesday,” Dilip Parmar , research analyst, HDFC Securities.
Parmar further noted that after Friday’s US inflation data, money markets are pricing a 175 bps hike by its September decision, implying two half points and one 75 bps hike.
“The last 75 bps hike by the Fed was made in November 1994.
“Spot USD/INR is expected to trade higher and a cross above 78.30 will pave way for 78.50 and 78.70 while on the downside 77.70 acts as support,” Parmar noted.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.55 per cent to 104.71.
On the domestic equity market front, the sensex ended 1,456.74 points or 2.68 per cent lower at 52,846.70, while the Nifty tanked 427.40 points or 2.64 per cent to 15,774.40.
Continuing their selling spree, foreign institutional investors offloaded shares worth a net Rs 3,973.95 crore on Friday, as per stock exchange data.

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