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Rupee falls sharply against dollar on Thursday

24 Feb 2022 Evaluate

Indian rupee depreciated sharply against the US dollar on Thursday, after Russia's invasion of Ukraine sent oil prices soaring and fanned inflation fears. Traders remain concerned as India Ratings has revised downwards its Gross Domestic Product (GDP) growth forecast for 2021-22 to 8.6 per cent from the consensus 9.2 per cent projected earlier. Some cautiousness also came with Fitch Ratings’ statement that India's economy is rapidly recovering from the pandemic but uncertainties remain around its medium-term debt trajectory. It said financial institutions face an uneven recovery due to lingering asset-quality risks and capital limitations. Sustained foreign fund outflows and heavy selling in domestic equities also weighed on investor sentiment. On the global front, the dollar was up on Thursday, with the euro weakening and increased demand for safe-haven currencies as concerns of an imminent Russian invasion of Ukraine intensify.

Finally, the rupee ended at 75.63, weaker by Rs 1.01 from its previous close of 74.62 on Wednesday. The currency touched a high and low of 75.75 and 75.02 respectively.

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