Rupee slips 7 paise to end at record low of 77.63 per dollar

Since the RBI policy on May 4, Rupee has flipped from being an outperformer to an underperformer, analysts said

FPJ Web DeskUpdated: Friday, May 20, 2022, 08:49 PM IST
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At the interbank forex market, the rupee opened at 77.51 against the greenback and moved in a range of 77.49 to 77.63 in the day's trade /Representative image |

The rupee slipped 7 paise to close at an all-time low of 77.63 against US dollar on Friday, weighed down by unabated foreign fund outflows and elevated crude oil prices.

At the interbank forex market, the rupee opened at 77.51 against the greenback and moved in a range of 77.49 to 77.63 in the day's trade.

The rupee finally ended at 77.63, down 7 paise over its previous close of 77.56.

Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd, “Since the RBI policy on May 4, Rupee has flipped from being an outperformer to an underperformer. With investor expecting significant tightening in liquidity and increase in rates are exiting Indian equities and bonds. However, RBI remains an aggressive seller of USD in spot and forward market. The sharp plunge in forward premium is an evidence of that. Thanks to RBI’s aggressive intervention, USDINR has not seen any blowout move. Going forward, USDINR can continue to drift upward at a slow pace. We expect a broad range of 77 and 78.30 over the near-term”.

Dilip Parmar, Research Analyst, HDFC Securities, said the dollar is about 2 percent off its recent high, seen last week, as risk-assets rebound after the People's Bank of China (PBOC) announced a 15 bps cut in the 5-year Loan Prime Rate to support the economy.

The dollar index marked the first weekly decline after six weeks of upward movement, driven by position liquidation and preference for other currencies to emerge at a lower level.

On the domestic equity market front, the BSE Sensex rebounded 1,534.16 points or 2.91 percent to end at 54,326.39, while the broader NSE Nifty jumped 456.75 points or 2.89 percent to 16,266.15.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.15 percent to 102.88.

Foreign institutional investors remained net sellers in the capital market on Friday as they offloaded shares worth Rs 1,265.41 crore, as per stock exchange data.

Brent crude futures, the global oil benchmark, rose 0.10 percent to USD 112.15 per barrel. ''We expect the USD-INR to trade sideways and quote in the range of 77.05 and 77.80,'' said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Jateen Trivedi, VP Research Analyst at LKP Securities, said, ''The dollar index still holds firm above USD 102 and crude around USD 110 per barrel gives the rupee little strength.''

According to Emkay Global Financial Services, during the week, the rupee hit an all-time low of 77.79 against the US dollar as global equity markets continued to sell-off on the back of multiple headwinds.

''Sentiments have taken a hit citing worries that growth would be derailed globally by inflation, rising interest rates and supply chain issues due to Chinese lockdowns,'' it said.

(With PTI inputs)

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