The rupee plunged well past 81.50 per dollar on Monday as the dollar climbed quickly to multi-year highs against most major currencies amid concerns that rising borrowing costs globally could trigger a global recession. This was the third straight session that record low levels were touched.
According to Bloomberg, the rupee last traded at 81.5038 to the dollar, down from its Friday closing price of 80.9900, when it opened at its lowest point of 81.5225 and hit a record low of 81.5587.
In early trade, according to PTI, the native currency dropped 38 paisa to a record-low of 81.47 versus the US dollar.
“The dollar index, which has seen significant buying as a solid hedge against interest rate increases and the inflation cycle, is what has sparked the panic. As long as there are no encouraging signs regarding inflation, the downward trend in the rupee would continue “LKP Securities Vice President and Research Analyst Jateen Trivedi said to ANI.
“The RBI policy, which will halt the depreciation of the rupee for a while, will be the next catalyst for the rupee next week. Before the RBI’s policy, the rupee range was between 80.50 and 81.55 “he added
According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the Indian rupee is likely to continue to decline as investors anticipate that the US Fed would raise interest rates aggressively in order to reduce inflation. “The RBI meeting this week, with its decision due on Friday, is suddenly the center of attention. We anticipate the RBI to raise rates by 50 basis points in order to curb the persistently rising inflation and stop the dollar’s depreciation “Iyer continued.