In early trade on Monday, the Indian rupee depreciated almost 43 paise to an all-time low of 81.52 against the US dollar, strengthening the American currency.
“The geopolitical risks escalation due to the Ukraine conflict , a negative trend in domestic equities and significant foreign fund outflows sapped the investor appetite”, forex traders said.
The Indian rupee opened at 81.47 against the greenback at the interbank foreign exchange, then suddenly fell down to 81.52, marking almost 43 paise over its previous closing.
Meanwhile, the country’s forex reserves declined USD 5.219 billion to USD 545.652 billion for the week ended September 16. On 23 September, the rupee slumped 30 paise to close at a fresh lifetime low of 81.09 against the US dollar.
Talking about this, Sriram Iyer, Senior Research Analyst at Reliance Securities, said, “The Indian rupee is likely to remain weaker as investors expect that the US Fed will continue to hike interest rates aggressively to cool inflation”.
He further added, “Focus now shifts to RBI’s meeting this week, with its decision due on Friday. We expect RBI to hike rates by 50 bps to cool stubbornly high inflation and prevent the currency from weakening further.”
