Mumbai: The Indian rupee weakened by 37 paise to hit a new all-time closing low of 81.90 against the US dollar on Wednesday as the greenback strengthened against major global currencies.
At the interbank foreign exchange market, the Indian rupee slipped below the 82-level for the first time against the US dollar.
The Indian rupee has weakened sharply in recent days largely due to a strengthening of the US dollar.
For the record, the US Federal Reserve had raised the repo rate by 75 basis points — which is the third consecutive hike of the same magnitude, in line with expectations, which essentially means that investors will move towards the US markets for better and stable returns amid the monetary policy tightening. The Fed also hinted that more rate hikes were coming and that these rates would stay elevated until 2024.
The US central bank seeks to achieve maximum employment and inflation at the rate of 2 percent over the long run and it anticipates that the ongoing hikes in the target range will be appropriate. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.
There has also been weakness in the equities markets. The Indian stock market’s key indices, Sensex and Nifty, slumped for the sixth consecutive session on Wednesday dragged by heavy selling pressure in the index heavyweights Reliance Industries, ITC and HDFC Bank.
The 30 stock S&P BSE Sensex slumped 509.24 points or 0.89 per cent to 56,598.28 points against its previous day’s close at 57,107.52 points.
The Indian equities witnessed volatile trading amid weakness in the Asian peers. The Sensex started the day with a deep cut at 56,710.13 points and slumped to a low of 56,485.67 points in the intra-day. The markets witnessed some good buying support around noon. The Sensex briefly turned positive, touching a high of 57,213.33 points in the intra-day.
This is the sixth consecutive day of losses in the benchmark indices. The Sensex had lost 37.70 points or 0.07 percent on Tuesday.
The broader Nifty 50 of the National Stock Exchange slumped 148.80 points or 0.87 percent to 16,858.60 points against its previous day’s close at 17,007.40 points.
The Nifty started the day in the red at 16,870.55 points and slumped to a low of 16,820.40 points in the intra-day trade. The Nifty rose to a high of 17,037.60 points in the intra-day. The Nifty had lost 8.90 points or 0.05 per cent on Tuesday.