Rupee at all-time low of 77.71 against $ as US Treasury yields spike

Mumbai: The rupee declined by 17 paise to close at its all-time low of 77.71 against the US currency on Tuesday as surging US bond yields dampened the appeal of riskier assets.

Losses in the domestic equities, high crude oil prices and forex outflows also weighed on the rupee. At the interbank foreign exchange market, the rupee opened lower at 77.65 against the greenback and finally settled at 77.71, down 17 paise over its previous close.

During the session, the rupee touched an intra-day low of 77.71 and a high of 77.62. On Monday, the rupee settled at 77.54 against the US dollar.

This is the fifth straight monthly decline for the rupee amid weak risk sentiments, foreign fund outflows and concerns over high inflation.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.5 per cent higher at 101.92. Global oil benchmark Brent crude futures advanced 1.77 per cent to $123.82 per barrel. US Treasury yields surged on Tuesday following a Federal Reserve Governor's comments that the central bank should be prepared to raise interest rates by 50 basis points at every meeting on until inflation is decisively controlled.

"The pressure on the rupee continues unabated due to the strength of the dollar, the exit by FIIs from the domestic market, and the worsening of the trade balance," a report by Emkay Wealth Management stated.

While the RBI may have nothing against a gradual depreciation of the currency, a sudden depreciation amounting to a speculative attack will be contained by the central bank, it noted.