The Indian rupee fell to a record low on Monday, falling below 77 against the U.S. dollar. The currency continued to depreciate amid weakness across global equity markets and a strong dollar.
The rupee opened at 77.06 against the U.S. dollar and fell further to 77.53, down 0.78% compared to its Friday close. It rebounded marginally thereafter to close at 77.46 against the dollar.
The previous closing low for the currency was at 76.97, hit on March 7.
The rupee may continue to trade weak on the back of a firm dollar amid the U.S. Federal Reserve's aggressive rate hike expectations to curb inflation, said IFA Global Research in a note. "Elevated crude oil prices and overall global uncertainty is expected to keep the rupee under pressure."
According to IFA Global Research, the Reserve Bank of India has been protecting the rupee which has led to the drop in forex reserves. The latest data from the RBI showed that forex reserves fell to $597.73 billion for the week ended April 29 from $617.65 billion a month ago.
The U.S. dollar continued its rally amid risk aversion in global markets and surge in U.S. Treasury yields, said the research desk at ICICI Securities. Yields extended gains after the U.S. non-farm payrolls data showed economy added 428,000 jobs in April above market expectations.
Further, the rupee slipped on a surge in crude oil prices, ICICI Securities said.
"The elevated U.S. yields remain a big risk factor for emerging market currencies like the Rupee; after holding on to the 76.50-76.75 bracket it has finally given in to reach new lows in the current move," said Imran Kazi, vice president at Mecklai Financial.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
