Rupee hits record low of 77.18 against US dollar as broad risk-off sweeps Asia
The rupee dropped as much as 0.3% to 77.1825 a dollar on Monday, slipping past the previous record low 76.9812 touched in March.
The Indian rupee fell to a record low as dollar strength dented demand for riskier assets and foreigners continued to dump the nation’s stocks.
The rupee dropped as much as 0.3% to 77.1825 a dollar on Monday, slipping past the previous record low 76.9812 touched in March.
Foreign funds have pulled out $17.7 billion from Indian equities this year, the highest on record, as the prospect of aggressive tightening by global central banks roiled markets.
The currency has also been buffeted by other headwinds including a widening current account deficit, and a surge in global crude prices. Even the Reserve Bank of India’s out-of-cycle rate increase last week hasn’t been able to stem the rupee’s decline.
“The RBI’s recognition of the need for urgency in normalising policy is a source of support,” BNP Paribas strategists Siddharth Mathur and Chidu Narayanan wrote in a note.
“However, as equity flows can dominate interest-rate sensitive flows, there is a high downside risk to the INR from a deterioration in equity market sentiment as a result of a rapid tightening in domestic financial conditions.”