The rupee recovered to gain a touch on Friday, tracking a weaker dollar and a robust rally in domestic stocks which made a stunning comeback from deep losses in the previous session driven by an increase in risk appetite after China cut a key lending benchmark to support its economy.
The rupee closes at a new all-time low of 77.73 against the dollar, the fifth record weak close in the last 10 trading sessions.
The rupee extended its losses into early Thursday after closing at a new all-time low, even as the dollar took a breather after heavy gains and as global stocks tumbled on increasing concerns that aggressive tightening by global central banks could choke growth.
The rupee closed at a new all-time low of about 77.58 against the dollar on Wednesday, tracking a rise in crude prices and a reversal in domestic stocks, with the two-day relief rally in equity benchmarks coming to an end.
India's foreign exchange reserves have nosedived since the rupee started to hit new all-time lows in March, days after Russia invaded Ukraine, which resulted in massive capital outflows from emerging markets assets as investors sought safe-haven assets.
The rupee started on a weak note as crude prices rose more than $1 a barrel in early Asian trade on Wednesday on hopes of demand recovery in China, and persistent foreign fund outflows weighed on investor sentiment.
The rupee weakened to a new all-time low of 77.69 against the dollar early on Tuesday, even as the US currency fought for a footing as investors trimmed bets on whether interest rate rises will drive further dollar gains.
"Higher trade...have put pressure on the rupee, which has already breached the INR/USD 77.0 mark and may touch 78.0 shortly," noted Acuite Ratings.
Indian equities and the rupee face more pain ahead after a broad and deep slump since the war on the edge of Europe as stagflation, which was considered a fallout of the Russia-Ukraine crisis, is fast becoming the baseline scenario.
Snapping its two-day winning streak, the rupee slumped by 15 paise to end at 77.40 (provisional) against the US dollar on Thursday, following risk-off sentiments amid increasing concerns over inflation globally.
The Indian rupee on Thursday plunged 30 paise to hit an all-time low of 77.55 in opening trade against the U.S. dollar amid a broader decline in Asian currencies and a lacklustre trend in the domestic equity markets.
The rupee appreciated further by 10 paise to settle at 77.24 (provisional) against the US dollar on Wednesday as the American currency retreated from its 20-year high levels.
The rupee strengthened early on Wednesday following a reversing of losses in the previous session, a day after closing at its all-time low of 77.44 against the dollar.
The rupee recouped some of its losses and ended on Tuesday at 77.32 against the dollar, a day after melting to its all-time low of 77.44.