The rupee depreciated by 32 paise or 0.4 percent to hit a record low of 82.64 against the dollar on Monday before making up lost ground. It had slipped below the 82 mark for the first time ever in the previous session.

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The Indian currency rebounded to 82.38 in mid-morning deals after hitting the record low, as crude oil prices retreated from five-week highs on the news of a cut in output by the OPEC+ grouping of top producers, though a rise in the greenback overseas continued to put pressure on it.

The dollar index — which measures the greenback against a basket of six other peers — was marginally up at 112.7 at the last count. The gauge has hovered near 20-year highs for the past few weeks.

Brent crude futures were down early a percent at $97 per barrel at the last count.

“India has outperformed both in terms of currency and equities by a large margin and a lot of that has to do with beneficial inflows... Foreign inflows have been driving part of India and Indonesia's outperformance, but when the US is under such pressure, it's a very difficult for India or any other market to make gains," Ken Peng, Investment Strategist-Asia Pacific at Citi Private Bank, told CNBC-TV18.

"A relative performance might still be okay but absolute gains are going to be very difficult to make,” he said.

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Analysts expect the rupee to stay under pressure in the short term.

"Bets for more aggressive Fed rate hikes, elevated US bond yields, the US dollar index and oil prices are further going to cause pain on the already stretched twin deficit front, and further dent the rupee," said Amit Pabari, Managing Director at CR Forex Advisors.

"It will be interesting to watch out if the RBI allows the USD-INR to go beyond 83 levels in today’s session... Overall, we expect the pair to trade in a range of 82.5-83 before breaking towards 83.5," Pabari added.

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Indian equity benchmarks Sensex and Nifty50 fell around 1.5 percent each amid broad-based selling amid weakness across global markets, as concerns persisted about the impact of steep rate hikes on economic growth.

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(Edited by : Sandeep Singh)

First Published:Oct 10, 2022 9:22 AM IST