Rupee declines sharply to 79.58 per dollar

The US currency surged to an almost two-decade high as a result of concerns about a worldwide recession, and the rupee fell precipitously to 79.57 against the dollar.

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As increasing safety bets in response to concerns about a global recession drove the US currency to an almost two-decade high, the rupee fell precipitously to 79.58 against the dollar, a new record low.

The rupee was last trading at 79.58 per dollar, according to PTI, while Bloomberg put the exchange rate at 79.57.

The rupee depreciated 13 paise from its previous close to quote at 79.58 at the interbank foreign exchange, down from 79.55 when it first started.

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The beginning trading of the local currency against the US dollar saw a high of 79.55 and a low of 79.62.

The rate of 79.62 per dollar is yet another intra-day record low, adding to the string of historically low rates experienced in recent months.

After settlements on Monday, the rupee had fallen 19 paise to end the day at a record low of 79.45 versus the US dollar.

The rupee is currently just a skip, jump, and a jump away from the important psychological threshold of 80 to the dollar.

The dollar index, which measures the value of one currency against a basket of six others, increased to 108.47, the highest level since October 2002, demonstrating the capital flight from assets denominated in virtually every other currency and into the safe-haven dollar.

“Risk-off sentiment is dominating global markets,” Yuting Shao, Macro Strategist at State Street Global Markets, told Reuters.

“The dollar is the go-to international reserve currency. So when there is a recessionary risk or a pickup of volatility, the greenback is the currency people rush to because that is the safest,” the macro strategist added.

Investors’ attention will be on macrodata, which includes this week’s retail inflation figure for India and Wednesday’s consumer price index from the United States, according to Reuters.

Increases in interest rates would continue if inflation rose sharply.

In the meantime, the Reserve Bank of India (RBI) unveiled a payment system for rupee settlements in international trade, with previous bank permission.

The RBI’s action comes as the Indian rupee has fallen to multiple record lows due to ongoing foreign portfolio withdrawals from domestic stock markets and a generally stronger dollar.