Indian rupee drops to another all-time low against UAE dirham in early trade

It depreciated 43 paise to 81.52 against the US dollar as the American currency strengthens and risk-averse sentiment among investors grows

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A Staff Reporter

Published: Mon 26 Sep 2022, 9:27 AM

The Indian rupee depreciated 43 paise to an all-time low of 81.52 against the US dollar (22.21 versus the UAE dirham) in early trade on Monday as the strengthening of the American currency and risk-averse sentiment among investors weighed on the rupee.

Moreover, escalation of geopolitical risks due to conflict in Ukraine, a negative trend in Indian equities and significant foreign fund outflows sapped the investor appetite, forex traders said.

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At the Indian interbank foreign exchange, the rupee opened at 81.47 against the greenback, then fell to 81.52, registering a fall of 43 paise over its previous closing.

On Friday, the rupee slumped 30 paise to close at a fresh lifetime low of 81.09 against the US dollar.

The Indian rupee is likely to remain weaker as investors expect that the US Fed will continue to hike interest rates aggressively to cool inflation, Sriram Iyer, senior research analyst at Reliance Securities, said.

“Focus now shifts to RBI’s (Reserve Bank of India) meeting this week, with its decision due on Friday. We expect RBI to hike rates by 50 bps to cool stubbornly high inflation and prevent the currency from weakening further,” Iyer said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.67 per cent to 113.94.

Global oil benchmark Brent crude futures fell 0.58 per cent to $85.65 per barrel.

On the Indian equity market front, the 30-share BSE Sensex was trading 797.73 points or 1.37 per cent lower at 57,301.19 points while the broader NSE Nifty fell 260.80 points or 1.51 per cent to 17,066.55 points.

Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs28.99 billion, as per exchange data.

Meanwhile, the country’s forex reserves declined $5.219 billion to $545.652 billion for the week ended September 16.

(With inputs from PTI)

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A Staff Reporter

Published: Mon 26 Sep 2022, 9:27 AM

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