Rupee near record low, sinks below 80 mark against US dollar

The rupee opened lower at 80.05 against the US dollar on Thursday as gain in dollar yielded pressure on the currency. An upturn in selling of Indian shares by foreign institutional investors and losses in domestic equities also added pressure. Easing oil prices, however, capped the losses.

Andrew Holland, CEO, Avendus Alternate Strategies said that he is not "overly worried" about the rupee going down. "I am looking at the rupee, which is at 80/USD and I am sure there is going to be a forecast out there saying it's going to 82/USD. It's slightly worrying; I am not overly worried, but with 10 months of import cover, I think it's something you need to start looking at and that could also take foreign investors view of India a little bit more negative in the shorter term because of the rupee movement.”

Hitesh Jain, Lead Analyst – Institutional Equities, YES Securities, said, "In terms of the INR outlook for the rest of this calendar year, we sense that the worst is priced in the currency, with the value likely to be peaking around 80.5-81 against the greenback. "

Global oil prices edged lower on Thursday as demand concerns outweighed tight global supply. Brent futures fell as much as 1.7 percent to $105.08 a barrel. West Texas Intermediate (WTI) futures followed suit and was one percent down to $98.87 a barrel.

The dollar Index — which gauges strength in the greenback against six peers — climbed marginally to almost 107.

Domestic equity benchmarks BSE Sensex and NSE Nifty50 made a flat start on Thursday.

Jain added that growing indication of global inflation, easing stress in the global supply chain coupled with slowing global aggregate demand, has been manifested by a downgrade in global economic forecasts. "Consequentially, markets are tapering the expectations on the quantum of Fed rate hikes, which can be characterised by a retracement in US 10yr yield. FII outflows from the markets have slowed during the first fortnight . All these developments allude to lesser downward pressure on the INR, with the USDINR due for some mean reversion or possibly a consolidation around the 79 mark."

The rupee had settled at 79.99 against the US dollar in the previous session.