Mumbai: The Indian rupee fell to an all-time low of 77.42 against the US dollar on Monday, Reuters reported.
The rupee on Monday fell 0.3% to 77.1825 per dollar, having touched a previous record low of 76.9812 in March.
Foreign funds have pulled out $17.7 billion from Indian equities this year, the highest on record, as the prospect of aggressive tightening by global central banks spooked markets.
The currency was also affected by adverse conditions including widening current account deficit and surging global crude oil prices. Even the Reserve Bank of India’s out-of-cycle rate hike last week hasn’t stopped the rupee’s fall.
“The RBI’s recognition of the need for urgency in normalising policy is a source of support,” BNP Paribas strategists Siddharth Mathur and Chidu Narayanan wrote in a note.
“However, as equity flows can dominate interest-rate sensitive flows, there is a high downside risk to the INR from a deterioration in equity market sentiment as a result of a rapid tightening in domestic financial conditions.”
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