The rupee weakened sharply on Monday as the dollar rose further from Friday as solid US jobs data raised expectations for more aggressive Federal Reserve policy tightening.
Bloomberg quoted the rupee at 79.6550 per dollar, a loss of about 42 paise from Friday’s closing price of 79.2413.
PTI reported that the rupee fell 40 paise to provisionally close at 79.64 against the US dollar.
In the interbank currency market, the domestic currency opened weakly at 79.50 per dollar. It fluctuated between a high of 79.45 and a low of 79.65 during the session. It eventually finished at 79.64, down 40 paise from the previous close of 79.24, according to PTI.
Reuters reported that the rupee fell 0.54 percent to 79.66 per dollar, following a short-lived gain on Friday that saw the currency rise following a 50 basis point rate hike by the Reserve Bank of India.
“The rupee was under constant pressure throughout today’s session, initially due to dollar shortages from speculators and later from importers,” a trader at a private bank in Mumbai told Reuters. “There was a general reluctance to take an extra day of risk.”
Blockbuster job growth in the US forced markets to act quickly and a 70 percent chance that the Federal Reserve would raise interest rates by 75 basis points in September, pushing two-year yields up 20 basis points on Friday and further inverting the curve. .
That risk haunted global equity markets.
But Indian stocks defied that global trend and gained on Monday thanks to robust capital inflows and oil prices cooling below $95 a barrel.
Indian financial markets will close on Tuesday.