By Malvika Gurung
Investing.com -- The Indian rupee continued its downward movement, extending its fall for the third consecutive session on Monday, as it tumbled past the 78 mark for the first time ever and hit a fresh lifetime low against the US dollar.
The domestic currency traded 0.13% lower against the greenback at 78.24/$1 at the time of writing, as the greenback gained in the foreign market, tracking broad sell-offs across equities after the US inflation for May 2022 jumped to a record forty-year high.
Post-market hours on Friday, the US inflation reading rallied to 8.6% on a YoY basis, recording a fresh 40-year peak and exceeding the analysts’ forecast of 8.3%.
As a result, markets globally were rattled with any hopes of the US Fed to slow down/pause the interest rate hike to address global economic growth, eradicating.
Instead, the red hot inflation data indicates the Fed to adopt an even more aggressive monetary tightening approach towards taming inflation than it already has, a move which will likely lead to global capital exiting EMs like India.
Further, foreign investors are relentlessly offloading their funds from domestic shares, weakening the currency. So far in 2022, FPIs have debited a net Rs Rs 1.8 lakh crore from equities and Rs 14,055 crore from bonds.
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