Indian Rupee plunges to 78.59 per dollar, a record low; more pain to come

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• Jun 28, 2022 | Poonam Nath

After closing at record lows in each of the previous four trading sessions, the rupee fell to a new all-time intra-day low of 78.59 per dollar.

Digital Desk: The rupee fell to a new all-time intra-day low of 78.59 per dollar on Tuesday, after closing at record lows in the previous four trading sessions, tracking weakness in global stocks from Wall Street's poor performance overnight and as oil prices recovered from last week's trail.

According to the national news agency PTI, the rupee opened at 78.53 against the dollar, then fell to 78.59, its all-time low, registering a 22-paise drop from the previous close, hurt by persistent foreign fund outflows and economic slowdown fears.

The rupee is worth 78.66 US dollars. Even though the dollar index, which measures the performance of the US currency against a crate of six currencies, was trading slightly lower on the day.

In the previous session, the rupee fell four paise to a record closing low of 78.37 against the US dollar.

Rahul Kalantri, Vice President for Commodities at Mehta Equities, said, "Continuous selling by FIIs (Foreign Institutional Investors) in domestic markets is also putting pressure on the rupee."

Further economic sanctions against Russia, according to Kalantri, may raise global energy prices and pressure emerging market currencies. "We expect the rupee to remain volatile this week, possibly reaching 78.55 levels," Kalantri added.

Early Asian trading saw a 1% increase in oil prices as the UAE's energy minister revealed that the country was producing close to its maximum capacity, defying expectations that it would help increase supply in a constrained market.

Indeed, following last week's crash, a rise in crude oil prices lowered market confidence even further. Brent crude futures rose $1.08, or 0.9%, to $116.17 per barrel today.

However, if the rupee continues to fall during the session, traders believe it will be supported by central bank dollar sales, limiting its losses.

Indian equities indexes fell in early trade on Tuesday, snapping a three-day winning streak amid mixed signals from international markets. Asian shares fell in early trading, mirroring the overnight jagged Wall Street session.

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