The Indian rupee opened at a record low against the US dollar on Tuesday weighed down by the broader rally in the greenback and a spike in US Treasury yields. The local unit opened 6 paise lower at 83.51 a dollar as against the previous close of 83.45.
The US dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.13% higher at 106.35.
The dollar and treasury yields gained after a more-than-expected increase in US retail sales indicated that the economy remained robust and the US Federal Reserve will wait longer to cut interest rates.
The 10-year US Treasury yield reached 4.66%, the highest since mid-November.
A rise in crude oil prices also pressurized the local currency. Brent crude oil rose 0.59% to $90.63 a barrel, while the US West Texas Intermediate (WTI) crude futures gained 0.62% to $85.94.
Meanwhile, Asian currencies and equity markets extended losses, amid escalating geopolitical tensions in the Middle East after lingering worries that Israel will respond to Iran’s attack over the weekend.
Sustained outflow of foreign funds and weakness in the Indian stock market also dragged the rupee to a lifetime low.
The Sensex traded 440.90 points, or 0.60%, lower at 72,958.88, while the Nifty 50 index fell 128.15 points, or 0.58%, to 22,144.35.
On Monday, Foreign institutional investors (FIIs) net sold Indian shares worth ₹3,268.00 crore, while Domestic Institutional Investors (DIIs) net purchased shares to the tune of ₹4,762.93 crore, as per provisional data available on the exchanges.
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