Indian Rupee falls further, touches the 81-mark against the dollar

The Indian rupee fell below the 81-mark against the US dollar during the early morning trade for the first time against the US dollar.
The Indian rupee is seeing its weakest phase against the dollar.
The Indian rupee is seeing its weakest phase against the dollar.IANS

The Indian rupee fell below the 81-mark during the early morning trade for the first time against the US dollar.

This was because of uncertainty created after the uptick in the dollar index, the increase in the policy rate by the US Fed and Bank of England, and the escalation in geopolitical tensions between Russia and Ukraine.

Moreover, the negative trends in domestic equities also weighed on sentiments.

At the interbank foreign exchange market, the rupee opened at 81.08 against the greenback, then fell further to 81.23, registering a fall of 44 paise over its previous closing.

On Thursday, the rupee depreciated 88 paise to close at an all-time low of 80.86 against the US dollar.

The Bank of England hiked its base rate by 50 basis points to 2.25 percent.

The dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.28 percent to 111.412.

A report from ICICI Securities said the Dollar Index may continue with its positive bias as the US Fed decided to raise the interest rate by 75 bps, for a third consecutive month and signaled that it would continue to lift rates this year at a most rapid pace to combat inflation, which is running hot.

Additionally, the US Federal Reserve announced it would continue with its plan to shrink its $9 trillion asset portfolio, which plays an important role in firming the stance of monetary policy. Additionally, this year two policy meets are pending, we may see a 75 bps rate hike in the November meeting and 50 bps in the December meeting. Additionally, other major central banks across the globe are likely to lag in tightening monetary policy, high inflation, and dwindling economic growth.

As long as the Dollar Index sustains above 107.50 level it may continue to rally till 113/114 levels. (KB/IANS)

Related Stories

No stories found.
NewsGram
www.newsgram.com