Why has the rupee fallen so sharply against the dollar on Monday 07th March?

On 07ths March, the Indian rupee lost 81 paisa in early trades to almost get to Rs.77/$, its lowest figure ever. The intensifying geopolitical risks due to the Russia-Ukraine conflict and the lag effect of sanctions on Russia are pushing traders towards safer currencies like the Dollar, Yen and Euro. In addition, foreign investors have sold $2.5 billion of equities in just the first 3 days of the month.

The rupee fell to a low of Rs.76.98 before some RBI intervention brought the rupee back to the 76.81 levels. On Friday, the INR had closed at around 76.17. The dollar index (DXY) is getting close to 99 and that is also putting pressure on the rupee. Amidst all this chaos, the Brent crude prices went beyond $130/bbl in early trades on Monday. RBI, with its massive forex reserves is expected to intervene and bail out the rupee if it weakens further.