The rupee edged closer to the historic low of 80-mark against the US currency on Thursday as it declined by a little over 18 paise to settle at 79.9975 amid a stronger greenback in overseas markets.
While wholesale inflation remained double-digit for 15 straight months to June, expected deterioration in the country’s current account deficit and forex outflows dragged the local unit near to the psychological low level of 80 against the greenback. A sharp correction in crude oil prices in the past few days, however, has been a breather for the local currency, analysts said. At the interbank foreign exchange market, the rupee started the day on a strong note and touched a high of 79.71 to a dollar in early trade. The local unit lost momentum after the dollar surged to 24-year high levels against a basket of global currencies in the early European trade.The rupee finally settled at the day’s lowest level of 79.9975 to a dollar, down by 18 paise over the previous close of 79.81. Some of the leading banks such as SBI were already quoting above 80 levels for selling the US dollar.
“The Indian rupee becomes the median performer among the regional currencies. The rupee closed at a record low for the fourth day in a row amid safe-haven demand for the dollar after US inflation surged to a 41-year high. The rate markets now are pricing aggressive rate hikes from Federal Reserve which supported the dollar,” Dilip Parmar, Research Analyst, HDFC Securities, said.
Spot USD/INR delayed the level 80 in today’s session but is expected to break in the coming days. The pair has resistance at 80.90 after crossing 80 while the support shifted to 78.80 from 78.50, he noted.