Dropping for the third straight session, the rupee depreciated by 11 paise to close at a fresh lifetime low of 78.04 against the US dollar on Monday as a global market meltdown and stronger greenback overseas weighed on investor sentiment.
The safe-haven dollar climbed as investors wagered on accelerated rate hikes by the Federal Reserve after US consumer inflation soared to a four-decade high in May.
Weak Asian currencies and persistent foreign capital outflows were the other major factors that dragged the rupee lower, forex traders said.
At the interbank foreign exchange market, the local currency opened at 78.20 and witnessed an intra-day high of 78.02 and a low of 78.29 against the US dollar.
The local unit finally settled at its all-time low of 78.04, down 11 paise over its previous close of 77.93.
“The Indian rupee, taking cues from weaker regional currencies plummeted to a life low. The dollar extended gains as US treasury yields rose after Friday's inflation shock raised speculation of a more aggressive rate hike from the Federal Reserve this Wednesday,” said Dilip Parmar, Research Analyst, HDFC Securities.
