The Reserve Bank of India and its peers in other emerging economies have been forced to defend their currencies in the wake of a confluence of dollar-supportive events.
However, the RBI wasn't seen actively intervening in the foreign exchange markets as it did on Friday, traders said.
"Nevertheless, most rated India-based corporates have protections in place, including natural hedges, some USA dollar revenues and financial hedges, to limit the negative credit implications of a potential further 10 per cent weakening of the rupee to the United States dollar from Thursday's (September 6) rate", Moody's Vice President Annalisa D'Chiara said in the report.
The rupee lost as much as 1.3% intraday before cutting some losses and ended at 72.45 a dollar - an all-time closing low, down 1% over it's previous close of 71.73 a dollar.
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"Apart from the dollar strength that's weighing on the EM currencies, concerns about financing a wider current-account deficit are also hurting the rupee", said Paresh Nayar, the Mumbai-based head of currency and money markets at FirstRand Ltd. "The next strong technical resistance is at 72/50-72.75 (to the dollar) level". The worst may be yet to come as the crude import bill for the world's fastest-growing oil user surged 76 per cent in July from a year earlier to $10.2 billion.
According to a data released by RBI on Friday, India's current account deficit (CAD) widened to $15.8 billion in April-June in value terms this year as against $15 billion in the same quarter of 2017-18, mainly due to a higher trade deficit.
Oil prices increased as US drilling for new production stalled and as the market eyed tighter conditions once Washington's sanctions against Iran's crude exports kick in from November.