Rupee Falls To Record Low Of 80.28 Against Dollar, Further Slip Expected

The US Fed raised rates by 75 basis points in line with expectations, and hinted at further hikes in the future and that rates would stay elevated until 2024.
Indian Rupee fell to record low against the US dollar | REPRESENTATIVE
Indian Rupee fell to record low against the US dollar | REPRESENTATIVE

After hitting record lows against the dollar on Thursday, the Indian rupee is expected to fall further as the United States Federal Reserve hinted at further and more aggressive rate hikes in a bid to control inflation.

The rupee opened at a record low of 80.2850 per US dollar, down from the previous session’s 79.9750.

The US Fed raised rates by 75 basis points in line with expectations, and hinted at further hikes in the future and that rates would stay elevated until 2024.

Asian currencies opened weaker with the Chinese yuan slipping below 7.10 per dollar. The head of treasury at Finrex Treasury Advisors, Anil Bhansali said, “After the hawkish Fed Reserve commentary, the rupee is (set to fall).”

If the Reserve Bank of India (RBI) decided to step back, the rupee would further lose grip, according to Samir Lodha, managing director at QuantArt Market Solutions.

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He said, “Once RBI allows INR to trade beyond 80 on a consistent basis, I expect rupee to head towards 82.0 in a couple of months on account of the trade deficit and due to global recession and money supply tightening.”

Founder and managing partner at Rockfor Fincap Venkatesh Srinivasan said, “Rupee will depreciate further with RBI intervention to control it whenever required.”

This time however, according to head FX at SMC Global Securities Arnob Biswas, any intervention by the RBI is likely to be less aggressive.

Biswas said, “RBI may not be aggressive considering the hawkish side of Fed. On top of that substantial drop in net liquidity in the system may warrant to do so.”

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