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Rupee Hits New All-Time Low, Slips To 77.55 Against US Dollar

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Mumbai: The Indian rupee has touched a fresh all-time low of 77.55 against the US dollar. The rupee slumped 30 paise in opening trade as a lacklustre trend in the domestic equity markets and a firm American currency weighed on investor sentiment, reports said.

The rupee slipped to a record low for the second time this week.

Forex traders said foreign fund outflows and a rise in crude oil prices also affected the domestic unit.

At the interbank forex, the rupee opened sharply higher at 77.52 against the US dollar, then fell to 77.55, registering a decline of 30 paise from the previous close. In the early deals, the domestic currency was trading in the range of 77.50 and 77.57.

The rupee had closed at 77.25 against the dollar in the previous session.

According to sources, the Reserve Bank may increase the inflation forecast in the meeting of the Monetary Policy Committee (MPC) next month and will also consider a hike in rates to check inflation.

The MPC meeting is to be held from June 6 to June 8, under the chairmanship of the RBI governor. This has been made mandatory to keep retail inflation in the range of 2-6 per cent.

US brokerage Morgan Stanley on Wednesday cut India’s growth forecast by 30 basis points for 2022-23 and 2023-24 on global odds, and warned that macro stability indicators such as inflation are set to get “worse”.

According to sources, the tightening of policy rates by major central banks, including the RBI, will adversely affect demand in the next 6-8 months and slow down the recovery process.

Apart from the Reserve Bank of India (RBI), several central banks, including the US Federal Reserve and the Bank of England, have raised their benchmark lending rates to rein in inflation resulting from the Russia-Ukraine conflict.

Foreign institutional investors remained net sellers in the capital markets on Wednesday as they sold shares worth Rs 3,609.35 crore, according to stock exchange data.

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