With the Indian rupee plunging to historic lows against the dollar, analysts have predicted that the local currency is all set to touch the 80-rupee barrier against the US currency.

For the past four to five days, the Indian currency has been facing severe blowbacks as foreign institutional investors have continued to dump Indian equities in search of safe haven US dollars, putting further pressure on the local currency.

At the start of the year, the rupee-dollar exchange rate was at 74. But recession fears, the Russian invasion of Ukraine and the resultant spike in oil and gas prices have put tremendous pressure on the rupee.

According to Bloomberg data, the currency has slumped to a new record low level 26 times since Russia invaded Ukraine late in February.

On Thursday, the local currency opened trading at a lifetime low of 79.71 (provisional) per US dollar compared to its previous close of 79.63.

Analysts believe that the rupee-dollar exchange rate will most certainly touch 80 as the experts expect the United States Federal Reserve to hike the interest rates by another 75 to 100 basis points at the end of the month to tackle hot inflation. This will further trigger the outflow of dollars from India and back to the US.

“Rupee is expected to depreciate today (Thursday) amid strong dollar and risk aversion in global markets. Market sentiments are hurt as red hot inflation in the US stoked bets that the US Fed may have to raise interest rates much more than expected, even 100 bps. Additionally, consistent FII outflows and concerns on looming recession may hurt rupee. US$INR (July) is expected to trade in a range of 79.50-80.00," said ICICI Direct in a statement.

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With the Indian rupee plunging to historic lows against the dollar, analysts have predicted that the local currency is all set to touch the 80-rupee barrier against the US currency.

With the Indian rupee plunging to historic lows against the dollar, analysts have predicted that the local currency is all set to touch the 80-rupee barrier against the US currency. For the past four to five days, the Indian currency has been facing severe blowbacks as foreign institutional investors have continued to dump Indian equities in search of safe haven US dollars, putting further pressure on the local currency. At the start of the year, the rupee-dollar exchange rate was at 74. But recession fears, the Russian invasion of Ukraine and the resultant spike in oil and gas prices have put tremendous pressure on the rupee. According to Bloomberg data, the currency has slumped to a new record low level 26 times since Russia invaded Ukraine late in February. On Thursday, the local currency opened trading at a lifetime low of 79.71 (provisional) per US dollar compared to its previous close of 79.63. Analysts believe that the rupee-dollar exchange rate will most certainly touch 80 as the experts expect the United States Federal Reserve to hike the interest rates by another 75 to 100 basis points at the end of the month to tackle hot inflation. This will further trigger the outflow of dollars from India and back to the US. “Rupee is expected to depreciate today (Thursday) amid strong dollar and risk aversion in global markets. Market sentiments are hurt as red hot inflation in the US stoked bets that the US Fed may have to raise interest rates much more than expected, even 100 bps. Additionally, consistent FII outflows and concerns on looming recession may hurt rupee. US$INR (July) is expected to trade in a range of 79.50-80.00," said ICICI Direct in a statement. WATCH WION LIVE HERE

Indian rupee set to depreciate further, to breach 80 per US dollar

The rupee recovered 21 paise to 72.91 against the US dollar early Tuesday on increased selling by exporters.

The dollar's weakness against some currencies overseas and a better opening of the domestic equity market also supported the rupee, dealers said,.

At the interbank forex market, the rupee opened strong at 72.98 and advanced further to trade at 72.91, reflecting a rise of 21 paise over its previous close of 73.12 against the dollar.

On Monday, the Indian rupee tumbled 67 paise to close at 73.12 against the US dollar on increased demand for the American currency from importers and unabated foreign fund outflows.

Meanwhile, the benchmark Sensex rose 118.44 points, or 0.34 per cent, to 35,069.36 in opening trade Tuesday.&nbsp;

The rupee recovered 21 paise to 72.91 against the US dollar early Tuesday on increased selling by exporters. The dollar's weakness against some currencies overseas and a better opening of the domestic equity market also supported the rupee, dealers said,.

The rupee recovered 21 paise to 72.91 against the US dollar early Tuesday on increased selling by exporters. The dollar's weakness against some currencies overseas and a better opening of the domestic equity market also supported the rupee, dealers said,. At the interbank forex market, the rupee opened strong at 72.98 and advanced further to trade at 72.91, reflecting a rise of 21 paise over its previous close of 73.12 against the dollar. On Monday, the Indian rupee tumbled 67 paise to close at 73.12 against the US dollar on increased demand for the American currency from importers and unabated foreign fund outflows. Meanwhile, the benchmark Sensex rose 118.44 points, or 0.34 per cent, to 35,069.36 in opening trade Tuesday.

Rupee recovers 21 paise to 72.91 against US dollar

With global crude prices remaining elevated, the rupee is likely to be under pressure, and may touch the 76-level&nbsp;against the US currency over the next three months, says a report.

The domestic currency has already crossed the 74 mark owing to continued strengthening of the dollar, lack of foreign flows and higher crude oil prices.

The unit lost over 15 per cent since the beginning of the calendar year.

"Assuming global crude prices stay elevated (slightly above $80/a barrel), we retain our bearish view on the rupee and see it plumbing to 76 over the next three months," says a weekend report by the Swiss brokerage UBS.

From April to the first week of August 2018, the RBI has been intervening in the forex markets to contain volatility, which lead to a massive drop in the forex reserves that plunged by $25 billion to $393 billion last week.

This has led to two successive repo rate hikes to the tune of 50 basis points in total.

By keeping policy rates on hold in October, the RBI hinted that it will not use interest rate defence as a tool to manage currency weakness, the report said.

Between April and October, the forex reserves has come down by $32.78 billion, while foreign exchange reserves stood at $392.078 billion as on October 26.

"Unlike in 2013, even as the rupee has weakened by 15 per cent calendar year-to-date against the dollar, it remains outside that group of most vulnerable currencies and the countrys forex reserves position is still reasonable," UBS analyst Gautam Chhaochharia said in the report.

He said while the country remains vulnerable in its external position, there is no need to press the panic button for NRI bond issuances, to stabilise the rupee, yet unless it becomes a political issue in the run-up to the 2019 general elections.

"However, in case external stress continues to rise from here (Brent continue to rise towards $100/a barrel and/or the rupee weakens towards the 80 levels, the option of raising dollar deposits ($30-35 billion) could be explored to stabilise the rupee," Chhaochharia said.

The report said the loose monetary and fiscal policy pursued by the policymakers five years ago led to exacerbated macroeconomic imbalances when the US Fed announced the start of tapering.

This caused the rupee to be amongst the "fragile five" currencies.

It believes that the macro fundamentals compare favourably with those in 2013 as policy buffers have been created.

"The inflationary pressures are manageable thanks to lower food prices, and the government remains committed to fiscal discipline although the deficit targets are quite stretched, and even as we expect the CAD to widen to 2.7 per cent of GDP in FY19, it is well below the 4.8 per cent peak registered in FY13," the report said, adding the

RBI's policy tilt is no longer accommodative.

The report further says the current liquidity shortage triggered bydefault by IL&amp;FS and group companies on their debt obligation is a liquidity squeeze and not systematic risk.

"We expect the RBI to neutralise the liquidity squeeze but think that an `easy money' period is not coming back in a hurry," it added.&nbsp;

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With global crude prices remaining elevated, the rupee is likely to be under pressure, and may touch the 76-level against the US currency over the next three months, says a report.

With global crude prices remaining elevated, the rupee is likely to be under pressure, and may touch the 76-level against the US currency over the next three months, says a report. The domestic currency has already crossed the 74 mark owing to continued strengthening of the dollar, lack of foreign flows and higher crude oil prices. The unit lost over 15 per cent since the beginning of the calendar year. "Assuming global crude prices stay elevated (slightly above $80/a barrel), we retain our bearish view on the rupee and see it plumbing to 76 over the next three months," says a weekend report by the Swiss brokerage UBS. From April to the first week of August 2018, the RBI has been intervening in the forex markets to contain volatility, which lead to a massive drop in the forex reserves that plunged by $25 billion to $393 billion last week. This has led to two successive repo rate hikes to the tune of 50 basis points in total. By keeping policy rates on hold in October, the RBI hinted that it will not use interest rate defence as a tool to manage currency weakness, the report said. Between April and October, the forex reserves has come down by $32.78 billion, while foreign exchange reserves stood at $392.078 billion as on October 26. "Unlike in 2013, even as the rupee has weakened by 15 per cent calendar year-to-date against the dollar, it remains outside that group of most vulnerable currencies and the countrys forex reserves position is still reasonable," UBS analyst Gautam Chhaochharia said in the report. He said while the country remains vulnerable in its external position, there is no need to press the panic button for NRI bond issuances, to stabilise the rupee, yet unless it becomes a political issue in the run-up to the 2019 general elections. "However, in case external stress continues to rise from here (Brent continue to rise towards $100/a barrel and/or the rupee weakens towards the 80 levels, the option of raising dollar deposits ($30-35 billion) could be explored to stabilise the rupee," Chhaochharia said. The report said the loose monetary and fiscal policy pursued by the policymakers five years ago led to exacerbated macroeconomic imbalances when the US Fed announced the start of tapering. This caused the rupee to be amongst the "fragile five" currencies. It believes that the macro fundamentals compare favourably with those in 2013 as policy buffers have been created. "The inflationary pressures are manageable thanks to lower food prices, and the government remains committed to fiscal discipline although the deficit targets are quite stretched, and even as we expect the CAD to widen to 2.7 per cent of GDP in FY19, it is well below the 4.8 per cent peak registered in FY13," the report said, adding the RBI's policy tilt is no longer accommodative. The report further says the current liquidity shortage triggered bydefault by IL&FS and group companies on their debt obligation is a liquidity squeeze and not systematic risk. "We expect the RBI to neutralise the liquidity squeeze but think that an `easy money' period is not coming back in a hurry," it added.

Rupee may touch 76-level against dollar in next 3 months: Report

Indian rupee hits lifetime low, stocks tumble on global markets sell-off