Rupee hits all-time low of 80 against US dollar

New Delhi, July 19: The Indian rupee hit 80 per dollar for the first time ever on Tuesday, as traders focus on central bank meetings this week, especially the US Federal Reserve.

Indian rupee declined 7 paise to an all-time low of 80.05 against US dollar in early trade, PTI reported.

The rupee has been staggering since the beginning of the year and has fallen 7.6 per cent so far. Indian rupee's loss meant gains for the US currency.

India policymakers have sought to arrest the currency's decline with a raft of measures from intervention to raising duties on gold imports with a weaker rupee adding to imported inflation pressures. Other emerging market currencies are also feeling the heat as a hawkish Federal Reserve lures capital toward the US.

Global factors such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions are the major reasons for the weakening of the Indian rupee against the US dollar.

Currencies such as the British pound, the Japanese yen and the euro have weakened more than the Indian rupee against the US dollar and, therefore, the Indian rupee has strengthened against these currencies in 2022, she said.

The outflow of foreign portfolio capital is a major reason for the depreciation of the Indian rupee, she said, adding, monetary tightening in advanced economies, particularly in the United States, tends to cause foreign investors to withdraw funds from emerging markets.

The Reserve Bank of India (RBI) regularly monitors the foreign exchange market and intervenes in situations of excess volatility. It has raised interest rates in recent months that increase the attractiveness of holding Indian rupees for residents and non-residents.

Earlier this month, the RBI raised the overseas borrowing limits for companies and liberalised norms for foreign investments in government bonds as it announced a slew of measures to boost foreign exchange inflows.

The RBI increased the ECB limit under the automatic route from USD 750 million or its equivalent per financial year to USD 1.5 billion, and eased norms for foreign portfolio investments in the debt market.