Rupee falls to record low of 78.77

BL Mumbai Bureau | Updated on: Jun 28, 2022

Strong dollar, rising crude prices and FPI outflows triggered the bearish sentiment

The rupee fell 43 paise, the single biggest fall in over two months, on Tuesday to close at a fresh all-time low as it was weighed down by a strong Dollar, FPI related outflows and demand for the greenback from oil marketing companies.

The Indian unit (INR) closed at 78.77 per Dollar (USD) against the previous close of 78.34. Intra-day, the domestic currency unit hit a low of 78.8550 and a high of 78.5325.

RBI’s intervention by way of sale of Dollars through Banks was muted in the market.

RK Gurumurthy, Head-Treasury, Dhanlaxmi Bank, said: “INR weakened to its all-time low on the back of strong demand from option-expiry related buying (exacerbated by quarter end demand). Offshore demand was also noticeably strong where near-month forwards in the offshore futures rupee market was markedly higher indicating demand from FPI portfolios.”

IFA Global, in a report, noted that the month-end expiry kept the pair volatile during the day. 

FII outflows and global risk aversion kept the investors on their toes as selling from the emerging markets intensified, it said. Oil importers were also seen on the dollar buying side on the back of month-end flows net-off. Elevated crude price further dented the sentiments for the Indian rupee, per the report.

Bond market

Meanwhile, yields of Government Securities (G-Secs) yields moved up, tracking higher US Treasury yields and higher global crude oil prices.

Yield of the 10-year benchmark G-Sec rose about 6 basis points, with its price declining about 38 paise.

Price of the aforementioned paper closed at ₹93.75 (previous close ₹94.125). Yield of this paper rose to close at 7.4661 per cent (7.4081 per cent).

Published on June 28, 2022
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