Rupee skids 17 paise to record low of 77.61 against the US Dollar

The rupee declined by 17 paise to close at its fresh lifetime low of 77.61 against the US dollar amid foreign fund outflows and concerns over aggressive rate hikes by the US Federal Reserve

The rupee declined by 1?7 paise to close at its fresh lifetime low of 77.6?1 against the US dollar on Wednesday amid unabated foreign fund outflows and concerns over aggressive rate hikes by the US Federal Reserve to tame inflation.

A stronger greenback in the overseas markets? and crude oil prices surging over 1 per cent to USD 113 per barrel also weighed on the local unit?.

At the interbank foreign exchange market, the rupee opened lower at 77.57 and later hit the day's low of 77.61 as the dollar rebounded in global markets following hawkish comments from US Federal Reserve chief Jerome Powell.

The domestic currency finally ended at its all-time low of 77.6?1, showing a loss of 1?7 paise over its previous close of 77.44.

"The dollar index took support near 103.50 and the capital market witnessed profit booking from higher levels, sending rupee into weakness," said Jateen Trivedi, VP Research Analyst at LKP Securities.

Analysts said the rupee weakened on concerns that the US Federal Reserve might consider more rate hikes to control inflation.

Fed chair Jerome Powell said the central bank will "have to consider moving more aggressively" if inflation that is running at a four-decade high fails to ease after earlier rate hikes.

"Comments from the Fed governor suggest that rate hike trajectory could continue in the coming meeting as well," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Crude oil prices jumped more than 1 per cent to USD 113.45 per barrel on expectations of demand recovery in China as well as supply concerns as Russia's oil production declined in April.

Meanwhile, the British pound fell against the US dollar after the UK inflation rose to a 40-year high of 9 per cent in April.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.3 per cent higher at 103.59.

Meanwhile, the 30-share BSE Sensex settled 109.94 points or 0.20 per cent lower at 54,208.53. During the day, it hit a high of 54,786 and a low of 54,130.89.

The broader NSE Nifty dipped 19 points or 0.12 per cent to finish at 16,240.30.

Foreign institutional investors remained net sellers in the capital market on Wednesday as they offloaded shares worth Rs 1,254.64 crore, as per stock exchange data.