Rupee hits record all time low of 81.55 against US Dollar.
In early trade today, the Indian rupee depreciated value of 44 paise to an all-time low of 81.55 against the US dollar. This resulted because of a firm US dollar and risk-averse sentiment pounded emerging market currencies. Selloff in domestic equities, escalation in Ukraine crisis and foreign fund outflows also weighed on the rupee.
Earlier on Friday, the Indian rupee sunk 30 paise to fall at a new lifetime low of 81.09 against the US dollar.
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Dollar has strengthened across the board on flight to safety and risk aversion.
CR Forex Advisors stated in a note -
“Amid a liquidity deficit of more than ?21,000 crore in the banking system, RBI will have lesser room to step in and curb rates and volatility. Despite the deficit, RBI might have used its reserves as forex storage fell by another $5.22 billion to $545.65 billion. The upcoming RBI’s monetary policy, which is due on the 30th September will be important as the announcement on the repo rate hike, cut in CRR, and changes in stance will be watchful..."
While the forex advisory firm said in another note -
“Nonetheless, currency market players want an early dose of injection to calm down the shaky nerves. However, further strength in the US dollar globally could not keep the rupee trading at an exceptionally fine. Overall, we expect the USD-INR pair to remain volatile with downside support at 80.50 and strong bullish momentum could not rule out 82.50 levels on the upside..."