Rupee Hits New Record Low Of 78.78, But RBI Intervention Limits Slide

Tuesday saw new lows for the rupee versus the dollar as rising oil prices stoked worries about long-term inflation. However, sporadic dollar sales by the central bank helped contain losses.

After ending at record lows in each of the previous four trading sessions, the rupee plummeted to a new intraday low of 78.78 against the dollar, following the decline in Wall Street's performance overnight and the comeback in oil prices after last week's collapse.

Reuters quoted the partially convertible rupee was trading at 78.75/76 per dollar, compared to its close of 78.34 on Monday. PTI reported that the domestic currency fell 41 paise to hit its intra-day record low of 78.78 per dollar.

"We believe India's external position remains relatively healthy, but with portfolio outflows expected to continue amid weakening global equity performance and further deterioration in BoP (Balance of Payment) in coming months, the risks of INR underperformance cannot be discounted," Emkay Global Financial Services said in a research note.