Rupee Sinks Below 81-Mark Against US Dollar For First Time In Early Trade

At the interbank foreign exchange, the rupee opened at 81.08 against the greenback, then dipped further to 81.23, logging a fall of 44 paise over its previous closing

On Thursday, the rupee plunged by 83 paise, its biggest single-day loss in nearly seven months, to close at an all-time low of 80.79 against the US dollar.

Source : Getty

The rupee declined 44 paise and sank below the 81-mark against the US dollar for the first time in early trade on Friday, weighed down by the strong American currency and risk-off sentiment among investors, reported PTI. According to Forex traders, escalation of geopolitical risk in Ukraine and latest rate hikes by the US Fed and Bank of England in a bid to tame inflation sapped risk appetite.

Further, the strength of the American currency in the overseas market, a negative trend in domestic equities, and risk-off moods amid escalation of geopolitical risk in Ukraine weighed on the local unit. At the interbank foreign exchange, the rupee opened at 81.08 against the greenback, then dipped further to 81.23, logging a fall of 44 paise over its previous closing.

On Thursday, the rupee plunged by 83 paise, its biggest single-day loss in nearly seven months, to close at an all-time low of 80.79 against the US dollar.

The Bank of England hiked its base rate by 50 basis points (bps) to a 14-year high of 2.25 per cent.

The Bank of Japan intervened in the FX market for the first time in 24 years to stem a falling Yen after it kept rates at record lows, IFA Global Research Academy said, adding that the Swiss National Bank hiked rates by a record 75 bps to 0.5 per cent.

The US Fed has hiked interest rates by 75 basis points to 3-3.25 per cent.

On Thursday RBI was conspicuous by its absence from the spot market as the rupee fell by 1 per cent possibly as it wanted the rupee to do the catching up, said Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.

"All major events are over for this month as we await RBI's MPC to give its verdict on September 30, 2022," Bhansali added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.05 per cent to 111.41.

Global oil benchmark Brent crude futures fell 0.57 per cent to $89.94 per barrel.

On the domestic equity market front, the 30-share BSE Sensex was trading 558.59 points or 0.94 per cent down at 58,561.13, while the broader NSE Nifty fell 153.10 points or 0.87 per cent to 17,476.70.

Foreign institutional investors were net sellers in the capital market on Thursday as they offloaded shares worth Rs 2,509.55 crore, as per exchange data.