Rupee depreciates to a new record low of around 79.40 per dollar due to inflation and energy volatility

Due to worries about a worldwide recession, the rupee had a rough start to the week, falling to a fresh intraday record low of close to 79.40 per dollar.

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As investor worries about a worldwide recession and mixed sentiment in the commodity markets supported the safe haven greenback, the rupee started the week on the back foot, falling to a fresh intraday record low of close to 79.40 per dollar.

The partially convertible rupee was reported by Reuters at 79.38/39 per dollar, down from its Friday closing rate of 79.25. Last week, the currency fell to its previous all-time low of 79.3750.

According to PTI, the rupee dropped 7 paise from its previous closing of 79.26 to 79.33 against the US dollar in early trade.

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The rupee is currently just a hop, skip, and a jump away from 80 versus the dollar, highlighting the currency’s significant devaluation since it started the year trading at roughly 74.

Investor worries about the pace of the world economy’s expansion helped the dollar stand strong and advance.

“The (dollar) could remain expensive until the risks around elevated global inflation, European energy security and China’s growth outlook have been resolved,” said analysts at Barclays in a note to clients, quoted Reuters.

As traders evaluated supply concerns against concerns about a recession or China’s COVID-19 limitations impacting demand, Brent traded higher on supply concerns while West Texas Intermediate (WTI) declined on Monday.

The market’s mood will be determined by US and Indian inflation later in the week, with a cautious attitude probably beforehand.

Benchmarks for domestic equities began the week on a sour note, halting three straight sessions of advances, as investors awaited domestic and global inflation data that would help to define the course of monetary policy.