Rupee falls by 41 paise to a record low of 79.36 against the US dollar

• Image Credit: Internet

• Jul 5, 2022 | Dhupali Das

It eventually closed at 79.36 (provisional), down 41 paise from its previous close. The rupee had closed at 78.95 against the US dollar on Monday.

Digital Desk: The rupee plummeted 41 paise against the US dollar on Tuesday, reaching a new historic low of 79.36 (provisional) amid a strong greenback overseas and continuous foreign fund outflows. 

At the interbank foreign exchange market, the local unit started the day at 79.04 against the US dollar and experienced an intraday high of 79.02 and a low of 79.38.

It eventually closed at 79.36 (provisional), down 41 paise from its previous close. The rupee had closed at 78.95 against the US dollar on Monday.

Anuj Choudhary, a research analyst at Sharekhan by BNP Paribas, said that the Indian rupee set a new record low versus the US dollar on Tuesday due to a stronger dollar and weaker-than-expected domestic data.

As per the government's preliminary figures issued on Monday, India's exports of goods increased by 16.78% year over year to USD 37.94 billion in June, while the trade imbalance reached a record USD 25.63 billion as a result of sharp increases in imports of gold and crude oil.

 Choudhary said, "Rupee is projected to trade on a negative note due to a solid tone in the US Dollar, rising oil prices, and gloomy market attitudes."

The Federal Reserve is expected to raise rates aggressively, said Choudhary, who also added that the increase in the import duty on gold might help the rupee to some extent by reducing the demand for imports of the metal. Over the next few days, the rupee could trade between 78.50 and 80.

The dollar index, which evaluates the dollar's strength in relation to a basket of six different currencies, increased by 0.89 per cent to 106.07.

The international oil benchmark, Brent crude futures, decreased 1.10 per cent to USD 112.25 per barrel.

On the domestic equity market, the BSE Sensex finished 100.42 points or 0.19 per cent lower at 53,134.35, while the larger NSE Nifty fell 24.50 points or 0.15 per cent to 15,810.85.

Despite buying shares worth Rs 2,149.56 crore on Monday, foreign institutional investors continued to be net sellers in the capital market, as per exchange data.