Rupee hits fresh record low of 77.58 against US dollar


The Indian rupee on Thursday weakened to a fresh record low against the US dollar, tracking losses in its Asian peers.

The fall in global and local equities after the US inflation data hinted at more aggressive tightening by the Federal Reserves amid a weakened trader sentiment weighed down by a slowdown in economies world over.

The currency opened at 77.56 a dollar and touched a fresh record low of 77.58 a dollar. At 9.30am, the domestic currency was trading at 77.57 a dollar, down 0.4 percent from its previous close.

Among Asian currencies, South Korean won fell 1.05 percent, Taiwan dollar was down 0.5 percent, Chinese Renminbi 0.41 percent, Philippine Peso 0.25 percent, while Malaysian ringgit and Thai Baht were down 0.2 percent each.

The US consumer price index jumped 8.3 percent last month from the year-ago figure. That was below the 8.5 percent year-over-year surge in March, which was the highest rate since 1981. Analysts now expect the Federal Reserve to raise rates by half-a-point in September following similar increases in June and July.

Russia-Ukraine war and China’s COVID lockdowns also worried investors.

Traders now await India’s consumer price inflation and index of industrial production data due later today after 5.30pm. According to Bloomberg CPI will be at 7.42 percent for April against 6.95 percent last month. IIP will be at 1.3 percent for March from 1.7 percent a month ago.

Traders also assess faster rate hikes by the RBI. Brokerage firm Goldman Sachs said in a note that it now expects the MPC to raise the repo rate by 50 bps at the June meeting followed by 25 bps each in the August, October and December meetings.

Recently, Morgan Stanley has trimmed India’s gross domestic product (GDP) growth forecasts to 7.6 percent for F2023 and to 6.7 percent for F2024 amid higher oil prices and slower global growth.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 104, up 0.1 percent from its previous close of 103.85.

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