As global volatility continues to weigh on Indian currency markets, the Indian rupee has hit a new low against the US dollar on Monday, breaching the 95 mark for the first time.
The local currency gave up its morning gains to depreciate 150 paise and touch 95.11 a dollar, compared to Monday's open of 93.47.
This comes on the back of the ongoing conflict in the Middle East, with Rupee in this month depreciating 411 paise or 4.5%.
Rupee had also hit a low on Friday breaching the 94 mark for the first time. The local currency had opened at 94.15 on Friday and throughout the day, depreciated 1.04 rupees to end the week at a record low of 94.75 a dollar, compared to Wednesday's close of 93.97.
However, G Chokkalingam, Founder & MD, Equinomics Research, believes the rupee could return to 90 levels once the war is over.
"Till the Iran war ends, it will remain weak. Once the war ends, it is likely to bounce back to at least 90 against the US Dollar," he said.
"The bigger risk is not the number itself, but the message behind it: that oil, geopolitics and dollar strength are starting to reinforce each other. In that environment, sectors dependent on imported inputs, fuel, or external borrowing would remain under pressure, while exporters and select defensives could relatively outperform. The currency market would then become a key transmission channel for inflation and earnings risk, making rupee stability just as important as equity market stability," added Harshal Dasani, Business Head, INVAsset PMS.
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