The rupee sank to an all time low of 80.65 against the US dollar in intraday trade as the US Fed upped its interest rate by 75 basis points for the third time.
The rupee opened weaker at 80.2775 against the previous close of 79.975. Dollar Index has jumped above 111.
Targeting inflation, Fed hikes the rate by 75 bpsForecasts show another large hike likely by end of the year
Amit Pabari, MD, CR Forex Advisors, said that there is an increased pressure on RBI after another jumbo hike by the Fed and markets expect a 40 bps hike in its meeting scheduled this month end.
"This time, possibly, RBI might not be able to use its forex reserves as much as it did earlier to protect the rupee, as there a severe liquidity crunch in the market.
"Clearly, there is a pressure on RBI and will be interesting to see how RBI will be able to defend rupee which is above 80.00 levels. If RBI lets rupee on its free course in line with the global peers, 80.50 to 81.00 shall be seen shortly," he said.