The rupee on Friday slid below the 76-mark for the first time this year and settled at an 11-week low as investors
assessed the global economic impact of the Russia-Ukraine conflict amid rising crude oil prices.
The rupee fell by 23 paise at close to 76.17 against the US dollar, the lowest closing level since December 15, 2021.
Persistent foreign fund outflows and a weak trend in domestic equities also weighed on the local unit, forex traders said.
At the interbank foreign exchange market, the rupee opened weak at 76.06 against the American dollar and fell further during the session as investors dumped riskier assets. The domestic unit oscillated between a high of 75.99 and a low of 76.22 during the session.
The rupee this week has weakened by 1.11 per cent or 84 paise, making it second straight week of losses for the local unit due to persistent forex outflows and rising crude oil prices.
"Recent market environment continues to favour a stronger dollar against rupee as there are high chances of the government missing fiscal target following a surge in crude oil prices and delay in diversification. Higher commodity prices could turn into imported inflation and the central bank will be forced to
change stance in coming months," HDFC Securities Research Analyst Dilip Parmar said.
Spot USD/INR is expected to stay right with resistance in the range of 76.30 to 76.50 while the support has been shifted to 75.70, he noted.
Looking ahead, the war in Ukraine will remain the primary focus along with commodity prices in particular crude oil and gold, Parmar said.