On Tuesday, the US central bank raised its policy rate by 75 basis points and signalled aggressive rate hikes in the future
Published 24.09.22, 02:14 AM
The rupee breached the 81-mark on Friday and crashed to yet another record intra-day low of 81.26 against the greenback. The Sensex plummeted 1020 points as the markets continued to be pounded by interest rate hikes by various central banks.
Though the rupee closed above 81 at 80.99 to the dollar on intervention from the Reserve Bank of India (RBI), it will remain under pressure given the global strength of the US currency. While some analysts said the domestic unit could depreciate to 81.50, others are of the view that low oil prices will limit its fall.
On Tuesday, the US central bank raised its policy rate by 75 basis points and signalled aggressive rate hikes in the future — triggering a chain reaction that led to the central banks of UK, Sweden and Switzerland jacking up their rates, while increasing the appeal of the dollar.
The dollar index (DXY), which gauges the greenback’s strength against a basket of six currencies, was trading 0.68 per cent higher at 112.11 against the previous close of 111.35. As the DXY hit a fresh 52-week high of 112.35, the rupee for the first time ever slipped below the 81-mark right at the open and slumped to 81.26 against the dollar.
Forex dealers said unlike Thursday, the RBI intervened through dollar sales by staterun banks and this resulted in the rupee rising to close at 80.99. “On the face of it, it seems that the RBI was able to restrict the rupee’s fall fairly well despite the dollar index appreciating against all currencies during the course of the day,’’ a dealer said.
Another dealer termed the intervention as “throughout and heavy”. The week also ended on a sombre note for the investing community as the Sensex tumbled 1020 points and the Nifty crashed below the 17350-mark. Reflecting the sell-off, market capitalisation of BSE listed companies plummeted over Rs 4.90 lakh crore.
Ending on a negative note for the third straight session, the 30-share BSE Sensex fell 1.73 per cent to close at 58098.92. The NSE Nifty fell 302.45 points or 1.72 per cent to end at 1732735. On a weekly basis, the Sensex lost 1.26 per cent and the Nifty, 1.16 per cent.