The rupee hit a record low of 80.08 against the US dollar on Monday amid a meltdown on Dalal Street tracking a global sell-off, a strengthening dollar overseas and rising oil prices.

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The rupee slipped below the 80 mark for the first time since July 21, 2022.

It closed at standing at Rs 79.9 against one dollar.

#Rupee ends at 79.96/$ Vs previous close of 79.87/$ pic.twitter.com/pl07soVMf4

— CNBC-TV18 (@CNBCTV18Live) August 29, 2022Fed Chair Jerome Powell's more-hawkish-than-expected tone at his speech in the annual Jackson Hole symposium dashed nascent hopes of moderate increases in COVID-era interest rates to tame inflation. Powell signalled that interest rates would be kept higher for longer to bring down inflation.

The dollar scaled a 20-year peak against major peers. The dollar index — which measures the greenback against a basket of currencies — rose as much as 0.6 percent to 109.45.

Crude oil prices climbed on fears of reduced output from the Organization of the Petroleum Exporting Countries (OPEC) and its allies — together known as the OPEC Plus.

Brent crude futures rose 0.9 percent to $101.9 a barrel.

What to expect in the rupee going forward

One can expect the rupee to move within a range of 79.70-80.50 against the US dollar in the next 1-2 weeks, according to Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities.

"The RBI has the twin objective of not letting the rupee become a weak outlier and it does not want the USD-INR to become too volatile. This means it may continue to sell dollars as the spot and forwards move to fresh all-time highs."

"However, this may not alter the trajectory of the pair and the path of least resistance would remain upward," he added.

Vishnu Varathan of Mizuho Bank on CNBC-TV18 said that he expect a 50 bps rate hike by Fed in September and expect rupee to test between 80-81 against US dollar.

The rupee had closed at $79.87 on Friday.

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(Edited by : Sandeep Singh)

First Published:Aug 29, 2022 10:47 AM IST