The rupee hit yet another record low of 78.96 against the dollar early on Wednesday as worries about elevated oil prices and inflation returned to the forefront.
PTI reported that the rupee depreciated 11 paise to a record low of 78.96 per dollar in opening trade, weighed down by persistent foreign capital outflows driven by flight-to-safety bets.
At the interbank foreign exchange, the rupee opened on a weak note at 78.86 against the greenback, then lost ground to quote at 78.96 — its all-time low level, registering a fall of 11 paise from the last close.
On Tuesday, the rupee had plunged by 48 paise to close at a record low of 78.85. It could have been much worse for the Indian currency had the Reserve Bank of India not intervened in the markets to shore up the rupee.
The domestic currency opened weaker against the dollar on Wednesday as renewed focus on the weak economic outlook prompted losses on Asian currencies and shares, Sriram Iyer, Senior Research Analyst at Reliance Securities, told PTI.
“The Reserve Bank of India (RBI) could be present to curb volatility, but the strength of crude oil could cap appreciation bias,” Mr Iyer said, adding that the range for the rupee on Wednesday is 78.50-79.10.
The rupee is down 1.87 per cent so far this month and has eroded a staggering 6.28 per cent this year.
Much of those losses have come after Russia invaded Ukraine, driving investors out of emerging market assets into the safety of the dollar and US assets.
Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 1,244.44 crore, according to stock exchange data.