Rupee plunges to end at record low of 80.79/USD

Mumbai, September 22

The rupee plunged by 83 paise — its biggest single-day loss in nearly seven months — to close at an all-time low of 80.79 against the US dollar on Thursday after the US Federal Reserve’s interest rate hike and its hawkish stance weighed on investor sentiments.

Forex traders said the US Fed’s rate hike and escalation of geopolitical risk in Ukraine sapped risk appetite.

Moreover, the strength of the American currency in the overseas market, a muted trend in domestic equities, risk-off mood and firm crude oil prices weighed on the rupee.

At the interbank foreign exchange market, the local currency opened at 80.27, then fell further to an all-time intra-day low of 80.95 against the American currency.

It finally ended at 80.79, down 83 paise over its previous close of 79.96. The rupee suffered its biggest single-day fall since February 24 when it had declined by 99 paise.

The US Fed hiked interest rates by 75 basis points to 3-3.25%. It was the third straight 75 basis points hike. Fed Chair Jerome Powell reiterated the central bank’s commitment to taming inflation.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.38% to 110.06.

Besides the hawkish US Fed stance, the US Dollar extended gains against its major crosses after Russian President Vladimir Putin announced partial military mobilisation.

“An aggressive Fed Chair Jerome Powell and Russian President Vladimir Putin’s escalation of geopolitical risk in Ukraine turned on the green light for King Dollar against most currencies,” said Dilip Parmar, Research Analyst, HDFC Securities.

Rupee along with other Asian peers tumbled to a record low. — PTI

Biggest single-day loss in seven months

• At the forex market, the local currency opened at 80.27, then fell further to an all-time intra-day low of 80.95 against the USD before ending at 80.79, down 83 paise over its previous close
• The rupee suffered its biggest single-day fall since February 24 when it had declined by 99 paise