Rupee Vs Dollar: Wednesday night, the rupee hit a new record low of 83.02 against the dollar. This was a reversal of gains made earlier in the day, as more signs showed that high inflation will keep major central banks raising interest rates, which will hurt the recent rally in risky assets.
After starting the day at 82.3062 and ending at 82.36, the rupee hit its all-time low against the dollar. During a volatile trading day on Wednesday, the local currency fell to a new all-time low of 83.02 against the US dollar.
PTI reported that the rupee dropped 61 paise, falling below 83 for the first time. It closed at 83.01 against the US dollar, a record low
“It was only a matter of time before 82.40 was broken. Yesterday, the Reserve Bank of India may have bought dollars in currency futures, which could be a sign of things to come. So it looks like no level is sacred for the rupee, so 83.50 should be the next goal once 83.00 is broken “Head of Treasury at Finrex Treasury Advisors, Anil Kumar Bhansali, said.
Traders from two private banks told Reuters that two public sector companies bought a lot of dollars, which caused the rupee to drop to a record low.
At one point on Tuesday, the rupee tried to get to the 82 mark, but it ended the day at 82.36 instead
A sell-off at the end of the day made the rupee close almost flat. A trader at a Mumbai-based bank told Reuters that Tuesday’s session was another sign that the rupee is likely to go down. The trader said that there would need to be “reasonable certainty” that US yields had reached their peak for the rupee to have a “sustainable and decent recovery.”
Some bankers Reuters talked to said that the reason the rupee fell back from the 82 level on Tuesday was that importers like oil companies wanted dollars.
Two others, on the other hand, said that it was likely because the RBI bought USD/INR contracts before they ran out on Friday.
The local currency hit a new all-time low of 82.9450 after risk assets reversed recent gains and fell. This happened after data showed that soaring food prices had sent British inflation back to a 40-year high of 10.1%, putting pressure on the Bank of England to raise rates quickly.
Even though global stocks have been going up in recent days, they were a little bit lower on Wednesday because investors were torn between good news about corporate earnings and worries that high inflation will lead to more aggressive policy tightening.
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