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.
After starting on a weak note, the rupee closed out the day at a fresh record low of 77.5788 a dollar as of 06:00 AM Eastern Daylight Time (EDT)/ 15:30 Indian Standard Time (IST), according to Bloomberg. Investing.com showed the rupee was last changing hands at 77.56 per dollar as of 1530 IST.
That comes a day after the rupee hit its record intra-day weak level of 77.7975 to a dollar before regaining some ground as the Reserve Bank of India intervened to stem the currency's losses.
PTI reported that the rupee fell by 16 paise to close provisionally at a record low of 77.60 against the US dollar from 77.44 close in the previous session; the currency's previous life low close was 77.50 last Thursday, according to PTI.
That fall in the rupee was driven by a rise in oil prices, which reversed on hopes of demand recovery in China, and persistent foreign fund outflows also weighed on investor sentiment.
While a higher opening in benchmark equities restricted the rupee's fall, Federal Reserve Chairman Jerome Powell's pledge that the central bank would ratchet up interest rates as high as needed to stifle a surge in inflation boosted the greenback after the dollar fell to its lowest in nearly two weeks in the previous session.
Brent crude futures were up $1 at a touch under $113 a barrel, paring some losses after oil prices fell around 2 per cent in the previous session. At the same time, a rebound in stocks ran out of steam as concerns about the economic growth outlook and rising inflation knocked sentiment.
Many analysts have characterised this week's sharp rally as a short-term bounce of the sort common during a lengthier downward trend for risky assets. Given so much macroeconomic uncertainty, few were willing to predict the end of selling after a bruising first five months of the year for risky assets.
"Investor sentiment and confidence remain shaky. As a result, we are likely to see volatile and choppy markets until we get further clarity on the 3Rs -- rates, recession, and risk," Mark Haefele, chief investment officer at UBS Global Wealth Management, told Reuters.