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Rupee depreciates against dollar

31 May 2022 Evaluate

Indian rupee depreciated significantly against dollar on Tuesday, on account of sustained dollar demand from importers and banks. Traders were anxious with private report stated that soaring prices and the subsequent hit to consumer spending and investments are likely to further dampen India's economy, as the central bank faces a finely balanced struggle to tame inflation via rate hikes without hurting economic growth. Some concern also came amid a private report stating that India’s economy probably grew slower than previously estimated last year, with virus curbs in the final quarter seen as a drag on activity while the war in Europe has added a new inflation hurdle to recovery. On the global front, euro's losses deepened on Tuesday after data showing eurozone inflation hit a record high in May, but expectations the European Central Bank will soon hike rates kept the single currency on track for its best monthly performance in a year.

Finally, the rupee ended at 77.68 (Provisional), weaker by 14 paise from its previous close of 77.54 on Monday. The currency touched a high and low of 77.70 and 77.62 respectively.

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