Rupee Falls Below 81-Mark Against US Dollar For The First Time In Early Trade
The rupee fell 44 paise and fell below the 81-mark against the US dollar in early trade on Friday, pushed down by the strong US currency and risk-off mood among investors, according to PTI. According to Forex dealers, the escalation of geopolitical risk in Ukraine, as well as recent rate hikes by the US Federal Reserve and the Bank of England to combat inflation, have dampened risk appetite.
Furthermore, the strength of the US dollar in the international market, a downward trend in domestic markets, and risk-off sentiments as geopolitical risk in Ukraine escalated impacted on the local currency. The rupee began at 81.08 versus the US dollar on the interbank foreign exchange, then fell to 81.23, a 44-paise drop over its last closing.
According to PTI, the rupee sank 44 paise and slipped below the 81-mark against the US dollar in early trade on Friday, weighed down by the strong US currency and a risk-off mentality among investors. The rise of geopolitical uncertainty in Ukraine, as well as subsequent price hikes by the US Federal Reserve and the Bank of England to control inflation, have lowered risk appetite, according to Forex dealers.
Furthermore, the international strength of the US dollar, a downward trend in domestic markets, and risk-off attitudes as geopolitical risk in Ukraine grew weighed on the local currency. On the interbank foreign exchange, the rupee began at 81.08 against the US dollar before falling 44 paise to 81.23.
The Federal Reserve of the United States raised interest rates by 75 basis points to 3-3.25 percent.
On Thursday, the RBI was conspicuously absent from the spot market as the rupee plummeted by 1%, probably because it wanted the rupee to catch up, according to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.
"All key events for this month have concluded as we anticipate the RBI's MPC decision on September 30, 2022," Bhansali remarked.
Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, rose 0.05 percent to 111.41.
Brent crude futures slid 0.57 percent to $89.94 a barrel, the global oil benchmark.
The 30-share BSE Sensex was trading 558.59 points, or 0.94 percent, lower at 58,561.13, while the wider NSE Nifty was down 153.10 points, or 0.87 percent, at 17,476.70.
According to exchange data, foreign institutional investors were net sellers in the capital market on Thursday, offloading shares worth Rs 2,509.55 crore.