Rupee weakens on higher demand for dollar from importers
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Indian rupee weakened against dollar in early deals on Tuesday due to higher demand for the dollar from importers amid lower opening in the domestic equity market. Traders were worried on fears that rate hike will lead to higher borrowing cost denting global growth prospects. Further, surging oil prices have provoked concerns on sustained high inflation, lower economic growth. Sentiments were also dented as rating agency Fitch in its Global economic Outlook-March 2022 has slashed India's growth forecast for the next fiscal to 8.5 per cent from 10.3 per cent. The agency slashed India's growth forecast on account of sharply higher energy prices. On the global front, yen fell through the psychological 120 level for the first time since 2016 on Tuesday, after a hawkish speech from Federal Reserve Chair Jerome Powell raised bets on higher U.S. interest rates and widened the policy gap on a dovish Bank of Japan.
The partially convertible currency is currently trading at 76.47, weaker by 29 paise from its previous close of 76.18 on Monday. The currency touched a high and low of 76.48 and 76.39 respectively.
