Rupee hits a new low amid dollar outflow

May 10, 2022 12:00 am | Updated 05:43 am IST - Mumbai

Likely to touch 78, say analysts

The rupee on Monday fell to an all-time low of 77.44 against the U.S. dollar due to a sell-off in equities amid concerns over weakening global economic growth prospects, outflow of the dollar and on fears of further monetary tightening by central banks to counter rising inflation.

The previous closing low for the rupee was 77.09, seen on March 7, 2022.

“The rupee opened with losses and the currency hit levels of 77.52,” Emkay Global Financial Services said. “A sell-off in the global equity markets which was triggered by the hike in interest rates by the U.S. Federal Reserve, the war in Europe and growth concerns in China due to the COVID-19 surge, led to the rupee depreciation,” it said.

Pramit Brahmbhatt, CEO, Veracity Financial Services Private Ltd., said, “The rupee depreciated on many counts. Continuous high crude prices is causing the outflow of dollars. The correction in equity markets is also causing adverse flow of dollars.”

“Monday’s trigger was caused by weakness in the Chinese RMB which has [spurred] weakness in Asian currencies. The rupee is expected to weaken further,” he added.

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