The rupee falls past 81.50 to reach a new low against the dollar.
Analysts say that focus now switches to this week's RBI meeting and its decision, which is due on Friday.
At the start of today's trading, the rupee lost 44 paise, falling to an all-time low of 81.53 against the US dollar, as a risk-averse attitude hurt the currencies of emerging markets. The worsening Ukraine crisis hampered the rupee, domestic stock market declines, and the exodus of foreign investment. Friday saw a 30-paise decrease in the rupee, which saw its value versus the US dollar close at a new record low of 81.09. On account of aversion to risk and a flight to safety, the dollar has surged globally.
"The RBI would have limited room to intervene and regulate rates and volatility as the banking system is witnessing a liquidity imbalance of more than ₹ 21,000 crores," said a source in the RBI. The RBI may have utilised its reserves notwithstanding the shortfall because foreign exchange storage decreased by another $5.22 billion to $545.65 billion. The announcement of the repo rate hike, CRR reduction, and changes in stance will be closely watched in the upcoming RBI monetary policy, which is scheduled for release on September 30th, according to CR Forex Advisors.