MUMBAI: The Indian rupee marked its record low close for a fourth straight session on Monday as the British pound’s weakness propped up the dollar index further in a risk averse environment.
The partially convertible rupee slid 0.8% to 81.6225 per dollar, having touched an all-time low of 81.6526 during the day, as stocks and currencies tumbled across Asia on global growth concerns.
The dollar index traded above 113-levels for the first time since 2002 as deep tax cuts in the UK sent the sterling to a record low.
The greenback has surged since the Federal Reserve sent hawkish signals last week, which forced the rupee to notch its worst weekly performance in one and a half years.
During the day, the Reserve Bank of India is suspected to have sold dollars via state-run banks around the 81.50-81.55 level to avert a larger decline in the rupee, four traders told Reuters.
The rupee, after opening at around 81.55, traded in a 21-paisa range.
“We expect the RBI to continue with significant intervention to stall rupee depreciation pressures, especially as the USD/INR pair moves towards 82 levels,” HDFC economists wrote in a note. However, if risk-off continues on worries over recession and the Ukraine-Russia war, it could keep the dollar stronger for longer and “rupee could then see a sustained depreciation trend over the next six-eight months, despite RBI intervention,” they added.
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