Rupee hits all-time low of 83.80 against dollar in early trade

This comes on the heels of significant downturn in Indian equity markets, foreign fund outflows

Mumbai: Rupee opened on a muted note and fell to an all-time low of 83.80 against the US dollar on Monday, as the risk off situation in world markets kept the dollar well bid.

Forex traders said the sharp downfall in the domestic unit came on the heels of a significant downturn in the Indian equity markets and foreign fund outflows.

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At the interbank foreign exchange market, the local unit opened at 83.78 and then fell to an all-time low of 83.80 against the American currency, registering a fall of 8 paise from its previous close.

On Friday, the rupee settled 1 paisa higher at 83.72 against the US dollar in a range-bound trade.

Over the past week, major global equities experienced a significant sell-off. The release of last week’s US Jobs Report, which fell significantly below expectations, sparked recession fears in the market, increasing demand for safe-haven assets. Additionally, the upcoming US elections in November are likely to keep investors on edge.

Meanwhile, tensions are escalating in West Asia following the assassination of Hamas leader Ismail Haniyeh in Tehran.

The Indian rupee has remained largely south of the 83.70 level despite the weakening of the US dollar. Additionally, oil prices saw an 11 per cent correction.

“However, despite these favourable conditions, the rupee has not appreciated, likely due to the Reserve Bank of India capping its movement. In the short term, the Rupee is expected to trade within the range of 83.75 to 83.90,” CR Forex Advisors MD Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 102.95, lower by 0.24 per cent.