Business: In early trading, the rupee fell 30 countries to 77.55 against the US dollar.

On the domestic equity market front, the 30-share Sensex was trading 822.94 points or 1.52 percent lower at 53,265.45, while the broader NSE Nifty declined 239.30 points or 1.48 percent to 15,927.80. Global oil benchmark Brent crude futures declined 1.11 percent to USD 106.32 per barrel. The Reserve Bank is likely to raise inflation projections in the Monetary Policy Committee (MPC) meeting next month and would also consider a rate hike to tame inflation which is above its comfort level, according to sources. The MPC, headed by the RBI Governor, is scheduled to meet between June 6 and June 8. It has been mandated to keep retail inflation in the range of 2-6 percent. American brokerage Morgan Stanley on Wednesday cut its India growth estimate by 30 basis points for 2022-23 and 2023-24 on global headwinds and warned that macro stability indicators like inflation are set to ”worsen” going ahead.

In early trade on Thursday, the rupee fell 30 paise to 77.55 against the US dollar, as a weak trend in domestic equity markets and a strong US currency impacted on investor morale. Foreign cash outflows and rising crude oil prices also weighed on the native currency, according to forex brokers. The rupee opened considerably down at 77.52 versus the US dollar on the interbank foreign exchange, then fell further to 77.55, a drop of 30 paise from the previous close. The native currency fluctuated between 77.50 and 77.57 in early dealings. The rupee had finished at 77.25 versus the dollar in the previous session. The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.10 percent higher at 103.95.

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According to sources, tightening of policy rates by major central banks, including the RBI, would adversely impact demand in the next 6-8 months and slow down the recovery process. Besides the Reserve Bank of India (RBI), several central banks including the US Federal Reserve and Bank of England have hiked their benchmark lending rates to rein in inflation, which has been exacerbated by the Russia-Ukraine conflict. Foreign institutional investors remained net sellers in the capital market on Wednesday as they offloaded shares worth Rs 3,609.35 crore, as per stock exchange data.

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