Rupee dips 15p to 77.73, may weaken further in FY23

MUMBAI: The rupee closed at 77. 73 on Thursday, down 15 paise from its previous close of 77. 58. The domestic unit is trending close to the all-time low of 77. 83 that it had touched on May 16. The currency came under pressure following a selloff in the equity markets.

It opened weak at 77. 72 and fell to alow of 77. 76 before recovering on the back of dollar sales by some public sector banks. Dealers said that the pressure on the rupee largely reflected the sales by foreign investors as, globally, the dollar index had weakened marginally and crude oil had softened on fears of slower growth.

The depreciating currency will put pressure on the margins of businesses that depend on imports and worsen the macroeconomic situation by making oil imports more expensive. However, it is not seeing any impact on retail demand for dollars as ‘revenge travel’ picks up after the pandemic. “Business travelcontinues to remain strong.

A large number of IT employees have applied for travel visas. We see astrong pickup in leisure travel as well. After two years of the pandemic, people are in the mood for revenge travel,” said Ebixcash World Money ED & business head, Hariprasad M P.

“Going by the feedback from education loan providers, there is a strong pipeline of students planning to travel abroad for studies. We expect the student demand for foreign exchange to pick up from next month,” he added.

In a report, India Ratings said, “The monetary tightening by the US Fed has triggered a portfolio investment outflow. Till May 16, 2022, foreign portfolio investors had pulled out $21. 2 billion from India. This, besides higher import bill, has put sudden pressure on the Indian rupee and forex reserve. ” India Ratings has said that the rupee is likely to weaken further during the current year.