Rupee hits new record low as dollar climbs 20-year high

Rupee falls 51 paisa to an all-time low of 80.47 against the US dollar as the U.S. Federal Reserve hinted at more aggressive rate hikes to tame inflation.

Forex traders said the strength of the American currency in the overseas market, a muted trend in domestic equities, risk-off moods and firm crude oil prices weighed on the local unit.

According to Bloomberg, while the Fed hiked the rates by 75 basis points, more importantly, it hinted that more hikes were coming and that rates would stay elevated until 2024. As a result, Asian currencies opened weaker, with the Chinese yuan slipping below 7.10 to the dollar.

Meanwhile, the US dollar climbed up sharply to a new 20-year peak on the day as the rate hike spooked investors and advanced 0.88 per cent to 111.61.

Sentiment took an additional hit from Russia's escalation of its war with Ukraine and tensions between Beijing and Taiwan.