Rupee slumps 30 paise to 75.08 against US dollar after hawkish Fed stance

Registering its third straight session of loss, the Indian rupee on Thursday depreciated by 30 paise to close at 75.08 (provisional) against the US dollar, tracking the strength of the American currency after a hawkish US Fed policy stance.

Forex traders said muted domestic equities, sustained foreign fund outflows and firm crude oil prices also weighed on the local unit.

At the interbank foreign exchange market, the local currency opened at 75.18 against the greenback and witnessed an intra-day high of 75.07 and a low of 75.31 during the session.

The rupee finally settled at 75.08, down by 30 paise over its previous close.

On Tuesday, the rupee had closed at 74.78 against the US dollar.

The forex and equity markets were closed on Wednesday on account of Republic Day.

This is the third straight session of loss for the local unit, during which it has declined by 63 paise.

"Indian rupee depreciated against US dollar on massive risk-off sentiments after the US Fed's hawkish stance," said Dilip Parmar, Research Analyst, HDFC Securities.

Fed, as expected, indicated a rate hike in March. Consequently, the dollar rallied following higher treasury yields. At the domestic front, India 10-year benchmark bond yield surged to 6.74 per cent, the highest since 2019, Parmar added.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.33 per cent up at 96.79.

Brent crude futures, the global oil benchmark, dipped 0.01 per cent to USD 89.95 per barrel.

On the domestic equity market front, the BSE Sensex ended 581.21 points or 1 per cent lower at 57,276.94, while the broader NSE Nifty slumped by 167.80 points or 0.97 per cent to 17,110.15.

Foreign institutional investors remained net sellers in the capital market on Tuesday, as they offloaded shares worth Rs 7,094.48 crore, as per exchange data.