Rupee plummets 84 paise to all-time low of 77.01 against U.S. dollar amid Ukraine crisis

The rupee tanked 84 paise to close at its lifetime low of 77.01 (provisional) against the U.S. dollar on March 7 as intensifying geopolitical risks due to the Russia-Ukraine conflict pushed investors to safe haven assets.

Forex traders said escalating tensions between Russia and Ukraine kept crude oil prices at an elevated level and heightened worries about domestic inflation and wider trade deficits.

Sustained foreign fund outflows and a lacklustre trend in domestic equities also weighed on investor sentiment.

At the interbank foreign exchange market, the rupee opened at 76.85 against the American currency but lost ground and settled for the day at a record low of 77.01, down 84 paise from the previous close.

On Friday, the rupee fell by 23 paise to close at 76.17 — its lowest closing level since December 15, 2021.

“The Indian rupee has plummeted to a lifetime low against the U.S. dollar as the deepening Russia-Ukraine conflict has sapped risk appetite in the market while prompting safe-haven flows into the U.S. dollar,” said Sugandha Sachdeva, Vice President – Commodity and Currency Research, Religare Broking Ltd.

Besides, the parabolic rise in crude oil prices towards multi-year highs and spiralling commodity prices are fuelling inflationary risks, which is a key headwind for the rupee-dollar exchange rate, Sachdeva added.

According to Mr. Sachdeva, the overall trend for the Indian rupee is skewed towards the downside and “a convincing close below the 77 mark would pave the way for further downside towards 77.50 mark in near term, while we envisage the local currency to test the 79 mark from a medium-term perspective”. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.46% higher at 99.09.

Global oil benchmark Brent crude futures jumped 6.55% to $125.85 per barrel.

On the domestic equity market front, the 30-share Sensex ended 1,491.06 points or 2.74% lower at 52,842.75, while the broader NSE Nifty plunged 382.20 points or 2.35% to 15,863.15.

Foreign institutional investors remained net sellers in the capital market on Friday as they offloaded shares worth ₹7,631.02 crore, according to stock exchange data.

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