Rupee Weakens To A New Record Low Of Near 79.40 Per Dollar On Inflation, Energy Jitters

The rupee started the week on the back foot, weakening to a new intra-day record low of near 79.40 per dollar as investor concerns about a global recession and mixed sentiment in the crude markets offered support to the safe haven greenback.

Reuters quoted the partially convertible rupee at 79.38/39 per dollar, compared to its close of 79.25 on Friday. The currency had hit its previous life-low of 79.3750 last week.

PTI reported that the rupee fell to 79.33 against the US dollar in early trade, a 7 paise loss from its previous close of 79.26.

The rupee is now just a hop, skip and jump away from 80 per dollar, underscoring the dramatic collapse of the currency which started the year changing hands at around 74 against the greenback. 

The dollar stood tall and gained as investor concerns about global economic growth offered support to the safe haven currency.

"The (dollar) could remain expensive until the risks around elevated global inflation, European energy security and China's growth outlook have been resolved," said analysts at Barclays in a note to clients, quoted Reuters.

While oil markets were unsteady on Monday, with Brent trading higher on supply concerns while West Texas Intermediate (WTI) dipped, as traders weighed supply concerns against worries about a recession or China's COVID-19 curbs hitting demand.

India and US inflation later in the week will drive market sentiment, with the cautious mood likely before.

Domestic equity benchmarks started the week on a ginger note, stalling a three straight sessions of gains, as investors eye domestic and international inflation data, which will clarify the direction of monetary policy path.