Indian rupee marks record closing low

The Indian rupee ended at a record closing low against the dollar on Monday as continued foreign portfolio outflows from domestic stockmarkets and a broadly stronger greenback weighed on the currency despite intermittent dollar selling intervention.

The partially convertible rupee closed trading at 79.4375/4475 per dollar in the local session at 1000 GMT, compared to its close of 79.25 on Friday. The unit touched a lifetime low of 79.44 during the session, surpassing its previous low of 79.3750 touched last week.

The Reserve Bank of India (RBI) announced an array of measures last Wednesday to bring in dollars, including allowing overseas investors to buy short-term corporate debt and opening up more government securities under the fully accessible route.

“These measures would ease some pressure on the rupee in the near term. However, a widening trade deficit and continued FPI outflows will continue to weigh on the INR,” said Sachchidanand Shukla, chief economist at Mahindra Group.

Indian shares fell as IT services major Tata Consultancy Services dragged down technology companies after posting weak results last week.

Foreign portfolio investors (FPI) have sold shares worth nearly $30 billion so far in 2022 with traders fearing more outflows if a global recession were to kick in.

The dollar was on the front foot at the start of a week in which US and Chinese data and European energy security were top of mind, as investor concerns about global economic growth offered support to the safe haven currency.

Traders said the RBI was spotted selling dollars via state-run banks sporadically to brake the decline in the rupee but the direction of the currency is unlikely to be altered any time soon.