Rupee declines to 77.74 against US dollar in early trade

Indian Rupee dropped 12 paise to 77.74 against US dollar in early trade. At the interbank foreign exchange, the Indian currency opened at 77.72 against the American dollar and lost ground to quote at 77.74, registering a fall of 12 paise from the last close.

The US dollar eased on Thursday in Asian trade but the downside got capped on poor US housing data and slowdown concerns. BSE Sensex crashed over 1,000 points and all stocks except ITC are trading in the red. Nifty, on the other hand, tanked 248.80 points or 1.75 per cent to 15,955.50.

As per Sriram Iyer, Senior Research Analyst at Reliance Securities, the domestic currency opened weaker against the US dollar since global equities dropped on apprehensions that rising inflation and monetary policy tightening will lead to an economic slowdown.

He added that inflation will remain the biggest strain on market sentiments—in India and abroad while mentioning that foreign equity outflows will keep appreciating bias limited.  

The domestic currency closed at 77.60 on Wednesday amid foreign fund outflows and strong greenback in overseas markets, news agency PTI reported. Dollar index was trading 0.15 per cent lower at 103.65 on rising US yields and apprehensions of higher interest rates.

US Fed chief Jerome Powell said the central bank would hike interest rates as high as needed to contain a spike in inflation which threatens the foundation of the economy. Foreign institutional investors (FIIs) turned net sellers on Wednesday and offloaded shares worth Rs 1,254.64 crore.

(With agency inputs)