Indian rupees today fell into new low of 79.85, Closely to reach 80 this week.
The Indian rupee continued to fall to hit a record low for a fourth straight session on Thursday as the US dollar continued its relentless rise against other major currencies, while domestic bond yields rose. Foreign institutional investors continued to dump Indian equities, putting further pressure on the Indian currency.
The rupee today fell to new low of 79.84, edging closer to 80 per dollar mark, as dollar resumed its relentless rise, driven by both expectations for faster policy tightening by the Federal Reserve and safe-haven flows as fears of a recession grow.
“The rupee is expected to depreciate today amid strong dollar and risk aversion in global markets. Market sentiments are hurt as red hot inflation in the US stoked bets that the US Fed may have to raise interest rates much more than expected, even 100 bps (basepoints). Additionally, consistent FII outflows and concerns on looming recession may hurt rupee. US$INR (July) is expected to trade in a range of 79.50-80.00," said ICICI Securities
Reason:
India imports more than two-thirds of its oil requirement and high global crude prices have threatened to push up the country`s trade and current account deficits even further and have been a key factor in hurting the rupee.
India`s benchmark 10-year bond yield rose 5 basis points to 7.39% in a reaction to the U.S. inflation number