Rupee Falls 30 Paise To 77.55 Against US Dollar In Early Trade
The rupee slumped 30 paise to 77.55 against the US dollar in opening trade on Thursday, as a lacklustre trend in the domestic equity markets and a firm American currency weighed on investor sentiment.
Persistent foreign fund outflows and elevated crude oil prices impacted the Indian currency, forex traders said.
At the interbank foreign exchange, the rupee opened sharply lower at 77.52 against the American dollar, then lost further ground to 77.55, registering a fall of 30 paise from previous close. In initial deals, the domestic currency was moving in a range of 77.50 and 77.57.
The rupee had settled at 77.25 against the dollar on Wednesday.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.10% higher at 103.95.
The Reserve Bank of India is likely to raise its inflation projections in the Monetary Policy Committee meeting next month and would also consider a rate hike to tame price rise, according to sources. The MPC, headed by RBI Governor Shaktikanta Das, is scheduled to meet between June 6 and June 8. It has been mandated to keep retail inflation in the range of 2-6%.
On Wednesday, Morgan Stanley cut its India GDP growth estimate by 30 basis points for 2022-23 and 2023-24 on global headwinds, and warned that macrostability indicators like inflation are set to "worsen".
According to sources, tightening of policy rates by major central banks, including the RBI, would adversely impact demand in the next 6-8 months and slow down the recovery process.
Besides RBI, several central banks including the US Federal Reserve and Bank of England have hiked their benchmark lending rates to rein in inflation, which has been exacerbated by the Russia-Ukraine conflict.