Rupee drops 51 paise to record low against US dollar

Rupee drops 51 paise to record low against US dollar

India s official currency Rupee dropped 51 paise to an all-time low of Rs 77.41 against the US dollar in early trade on Monday.

The Rupee lost ground to 77.42 at the Interbank foreign exchange, falling 52 paise from the last close, after opening at 77.17 against the American dollar. The previous record low of 76.98 was reached in March.

On Friday, the rupee had slumped by 55 paise to close at 76.90 against the US dollar.

The demand for riskier assets and the foreign investors who dump domestic stocks could be the reason behind the drop in value of the Rupee.

Investors are worried that the broader Asian stocks could decline further due to the tighter COVID lockdown in Shanghai, which could affect global economic growth.

Sriram Iyer, Senior Research Analyst at Reliance Securities said that the Indian rupee opened against the dollar on Monday, as weakness in global equities weighed on sentiments due to concerns over the outlook and rising bond yields.

Risk appetite has weakened due to concerns about inflation that could cause more aggressive rate hikes by the central banks, according to traders.

The dollar index, which measures the strength of the dollar against a basket of six currencies, was trading 0.35 per cent higher at 104.02, tracking rising US yields and fears of higher interest rates.

Asian and emerging market peers started to struggle this Monday morning and will weigh on sentiments.

On the domestic equity market, the 30 share Sensex was trading 737 points or 1.34 per cent lower at 54,098. The NSE Nifty declined 220.25 points or 1.34 per cent to 16,191. 00 points.

The global oil benchmark Brent crude futures rose 0.14 per cent to USD 112.55 per barrel.

Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs 5,517. As per stock exchange data, 08 crore were reported.