Rupee Breaches 80/$ Mark Again, For The First Time In Over 2 Months

Rupee in trade on August 29, 2022 opened 16 paise lower at 80.03/ USD as against the earlier close of 79.87. On expected lines, rupee slipped to a fresh low and breached 80 per dollar mark again for the first time in over 2 months. So, far during the day, the domestic unit's low and high are 79.975 and 80.135, respectively. Last month, the rupee hit an all time low of 80.065.

Earlier last week, Fed Chair stated to maintain restrictive policy in order to decelerate inflation.

A trader at a Bank in Mumbai in a leading business dailies report on the rupee outlook suggested that rupee shall 'most likely' hit a record low, if not at open, then later on during the session.

The US dollar ascended today and hit a 5-week high on the yen following US Federal Reserve Chair Powell's hawkish take to continue with higher rates for longer to curb soaring inflation.

"There has been overall reluctance to take the rupee below 80, but the extent of equity sell-off, the dollar's surge and the yuan's weakness should be enough to take the rupee below the psychological level," the Mumbai-based trader noted.

A lot will "obviously" depend on the Reserve Bank of India and what it does at open, he added.

Earlier on Friday, Societe General in a note suggested that the domestic currency shall remain under pressure as against the US dollar as slowing growth globally as well as the Fed's interest rate stance shall overshadow RBI's intervention.

"The RBI is likely to intervene at key levels such as 80," Kunal Kundu, economist at Societe Generale, wrote in the note. "However, we believe that such interventions would provide opportunities to buy on dips in the USD/INR, rather than establish sustained INR strength vs the USD,"

Meanwhile, on the hawkish Fed interest rate stance, Indian markets tumbled sharply, with Nifty hitting 17,166 at day's low.