The rupee fell 22 paises against the US dollar on Monday, analysts said, after the latter faced strong bids in international markets, helped by the sell-off in domestic stock markets.
The rupee closed at 76.64, down 22 paise from its previous close of 76.42 on Friday.
“The dollar index rose as market sentiment is fragile as rising inflation will lead to a faster rise in interest rates. Also FII outflows,” IFA Global said in a note. “China’s COVID lockdowns and a likely EU embargo on Russian oil imports have weighed on investor sentiment, who rushed towards a safe haven dollar,” she added.
“The INR remains weak, following global cues. Despite falling crude oil prices, global sentiment remained cautious amid rising risk to global demand as ongoing supply-side inflation prompted aggressive policy tightening on the one hand and increased COVID cases on the other,” Kotak Mahindra Bank said in a note.
The lender said the ongoing sell-off in foreign portfolio investors (FPI) ($3.3 billion in April 2022) has further weighed on the rupee. “We expect the INR to continue to trade in the 76-77.50 range in the near term amid global uncertainties,” the bank said in the statement. The rupee could have continued to depreciate. But the 4.38% correction in Brent crude prices to $101.98 has brought partial relief.
