Rupee Briefly Hits 80 A Dollar, Closes Just Below That Key Level: Report

The rupee briefly touched the key psychological level of 80 per dollar on Monday, but closed just below that mark, reversing sharp gains from earlier in the session, reported PTI.

Other news agencies such as Reuters and Bloomberg reported that the partially convertible rupee slumped to a record closing low of around 79.98 against the dollar, versus Friday's close of 79.88. 

Both those agencies said that the Indian currency had dropped to an intra-day low of 79.985 per dollar during the session.

But PTI reported that the rupee had briefly hit an intra-day low of 80 against the dollar and closed just below that at 79.98 provisionally.

At the interbank forex market, the domestic currency opened at 79.76 against the greenback but later lost ground to touch the psychological low mark of 80.00 against the American currency, said PTI.

The local unit recovered some lost ground and closed provisionally at 79.97, registering a fall of 15 paise over its previous close of 79.82 against the greenback.

News agencies last week had reported that some banks were already asking 80 rupees for a dollar in currency exchange transactions, including the State Bank of India.

What did not help the rupee was the reversal in crude prices, which have see-sawed in recent times.

After falling below the 100 mark earlier in the session, Brent crude prices hovered around $104 a barrel, which analysts said added to the burden on the rupee.

India imports more than 80 per cent of its oil needs, and high global crude prices have threatened to increase the country's trade and current account deficits when the rupee has repeatedly breached several record lows.

What has hurt the currency is the foreign investors exodus from Indian stocks and other assets and into dollar-denominated assets in a broader global trend.

Indeed, the latest stock exchange data showed foreign institutional investors (FIIs) remained net sellers in the Indian capital markets on Friday, offloading shares worth ₹ 1,649.36 crore.

"The Indian rupee, opened in the green on strength in domestic equity markets and a weak US dollar. However, the rupee weakened in the latter half of the day on a surge in crude oil prices and selling pressure by FIIs. FII outflows rose to Rs 1,649 crores on Friday," said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.

Mr Choudhary further said that the rupee is likely to trade with a positive bias of rise in risk appetite in global markets and weakness in US dollar. Improved global risk sentiments may also support the rupee.

"However, pullback in crude oil prices and continued selling pressure by FIIs my cap sharp gains in the rupee. USDINR spot price is expected to trade in a range of Rs 79.20 to Rs 80.80 in next couple of sessions," he added.