The rupee fell to a fresh low of 78.84 against the US dollar and closed at a record low of 78.77 before capital outflows and global risk aversion kept investors on their toes, even as the sell-off in emerging markets intensified. Went.
The domestic currency fell to a new low of 78.84 during the day, as against the previous day’s close of 78.34. Oil importers were also seen favoring dollar buying due to month-end inflows. Higher crude oil prices further affected the sentiment of the Indian rupee.
“It appears that offshore markets and carry traders are also seeking to reduce their shorts in dollar-rupee. Buying related to early morning expiry pushed the pair up,” said Anindya Banerjee, Vice President, Kotak Securities Ltd. Oil prices are rising again due to a supply crunch as members of OPEC. Libya and Ecuador are suspending oil production amid political unrest. In addition, all eyes are on the G7 meeting for further signs as member nations consider a new set of sanctions, including a proposal to impose a price cap on Russian oil imports. Religare Broking Ltd Vice President Sugandha Sachdeva said higher demand from the US and easing of sanctions in China could further propel oil prices and act as a major headwind for the domestic currency.
The benchmark Sensex rose 16 points to 53,177.45 and the NSE Nifty index rose 18 points to 15,850.20.
While the US is expected to increase by 75 basis points, the ECB is due to join the league in its July meeting. Financial conditions tightened and elevated inflation Supporting the safe-haven dollar index, global growth is triggering vague concerns of a slowdown. However, the RBI may continue to use its foreign exchange reserves to contain additional volatility in the Indian rupee, which will provide some cushion to the domestic currency.