New Delhi: The rupee on Wednesday fell 19 paise to close at an all-time low of 78.32 against the US dollar due to foreign fund outflows and losses in domestic equities. Forex traders said a strong greenback overseas also weighed on the rupee’s sentiment. However, a fall in crude oil prices in the international market limited the losses to the rupee. In the interbank forex market, the local currency opened flat against the greenback at 78.13 and saw an intra-day high of 78.13 and a record intra-day low of 78.40.
The domestic unit finally ended at 78.32, 19 paise lower and lower than its previous close of 78.13. (Also read: ‘Styles a little different’ Shark Tank India fame Anupam Mittal talks about co-judges)
Sugandha Sachdeva, Vice President – Commodity and Currency Research, Religare Broking said. (Also read: 7.5% economic growth expected this year: PM Modi at BRICS Business Forum)
Sachdeva said that sentiment has been hit amid deteriorating global growth prospects and central banks want to act aggressively in their fight against inflationary forces, Sachdeva said.
Investors were seen flocking to the safety of the US dollar as consumer price inflation in the UK hit a 40-year high of 9.1 per cent in May.
Market participants await Fed Chair Jerome Powell’s two-day testimony to Congress to provide further clues as to whether the US central bank is prepared to deliver another major rate hike at its July meeting.
“This will provide further signals for the Indian rupee going forward, which is still finding a lot of cushion around the 78.50 mark,” Sachdeva said.
“The rupee weakened below 78.30 on the back of aggressive Fed’s stance and aggressive selling by FIIs in Indian markets,” said Jatin Trivedi, VP Research Analyst, LKP Securities.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.05 per cent to 104.48.
Global oil benchmark Brent crude futures fell 4.46 per cent to $109.54 per barrel.
On the domestic equity market front, the BSE Sensex ended 709.54 points or 1.35 per cent lower at 51,822.53, while the broader NSE Nifty fell 225.50 points or 1.44 per cent to 15,413.30.
Foreign institutional investors remained net sellers in the capital markets on Wednesday as they offloaded shares worth Rs 2,920.61 crore, according to stock exchange data. Meanwhile, RBI data showed that India’s current account deficit stood at 1.2 per cent of GDP in FY2011-22, as against a surplus of 0.9 per cent of GDP in FY2011. A higher CAD also weakens the local currency.