Rupee falls by 25 paise to 76.42 against US dollar

2 min read . Updated: 22 Apr 2022, 08:08 PM IST Livemint

Losses in domestic equity markets, and forex outflows have dented the investor sentiment

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Domestic currency rupee declined by 25 paise to close at 76.42 against the US currency on Friday due to forex outflows and a stronger dollar which touched its 25-month high levels on expectations of a 50-basis point rate hike by the US Federal Reserve in May. Losses in domestic equity markets, and forex outflows have also dented the investor sentiment, forex dealers said.

At the interbank forex market, the rupee opened sharply lower at 76.31 against the greenback and lost further ground during the session. The domestic unit witnessed an intra-day high of 76.19 and a low of 76.50.

The dollar index touched its 25-month high level against a basket of world currencies on Friday before trading at 100.84 on expectations of a 50 basis point hike by the US Fed in May.

"I would say that 50 basis points will be on the table for the May meeting," Federal Reserve Chairman Jerome Powell said in an IMF panel discussion.

The rupee gave up its weekly gains after Federal Reserve Chairman Jerome Powell said that a 50 basis-point rate hike was on the table for the May meeting as the central bank aims to curb elevated inflation in the US, Emkay Global Financial Services said in a note. The US Dollar index erased its losses after the comment from the Fed chairman and jumped towards 100.90 levels again

The dollar index today rose past 101 this week for the first time since March 2020, as the greenback set its latest 20-year high on the yen and tested a two-year peak on the euro, supported by high U.S. Treasury yields and expectations of good economic data. European currencies weren't helped by the latest fighting in Ukraine, which said Russia had started an anticipated new offensive in the east of the country.

Foreign institutional investors remained net sellers in the capital market on Friday as they offloaded shares worth ₹2,461.72 crore, according to the stock exchange data.