NEW DELHI, India: On 7th March, the rupee plunged 84 paise, closing at an all-time low of 77.01 against the U.S. dollar, due to the geopolitical risks caused by Russia’s invasion of Ukraine, which pushed investors to safe-haven assets.

According to Forex traders, escalating tensions between Russia and Ukraine kept crude oil prices high and caused concerns about domestic inflation and wider trade deficits.

On 4th February, the rupee fell by 23 paise, closing at 76.17, its lowest closing level since 15th December 2021.

“The worsening Russia-Ukraine conflict has removed the market’s risk appetite and prompted safe-haven flows into the U.S. dollar,” said Sugandha Sachdeva of Religare Broking Ltd, as quoted by indianexpress.com.

Inflationary risk, which is a key headwind for the rupee-dollar exchange rate, is being fueled by the rise in crude oil prices towards record highs and spiraling commodity prices, he added.

“The overall trend for the Indian rupee is skewed towards the downside and a convincing close below the 77 mark would pave the way for further downside towards 77.50 mark in the near term, while we envisage the local currency to test the 79 mark from a medium-term perspective,” Sachdeva added.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.46 percent higher at 99.09, while global oil benchmark Brent crude futures rose 6.55 percent to $125.85 per barrel.

In terms of the domestic equity market, the 30-share Sensex ended 1,491.06 points, or 2.74 percent lower, at 52,842.75, while the broader NSE Nifty plunged 382.20 points, or 2.35 percent, to 15,863.15.

According to stock exchange data, foreign institutional investors remained net sellers in the capital market, offloading shares worth 7,631.02 crore.