Following the hawkish speech by Federal Reserve chair Jerome Powell on Monday, the Indian rupee plunged significantly and briefly approached the 80 level versus the US dollar.
At 11 a.m., the rupee was trading at 80.04 against the US dollar, up from the previous trading session's finish of 79.86.
In the opening minutes of trading on Monday, the rupee dropped to a low of 80.14 against the US dollar as the US dollar index surged well past the 109 level.
"The hawkish speech by Jerome Powell of the Federal Reserve has pushed up bond yields, dragged down global markets, and supported the US dollar.
Maintaining a restrictive stance on policy for some time will probably be necessary to restore price stability.
Powell and Fed speakers have made it plain that future trajectory would be data reliant "said Kunal Sodhani, vice president of Shinhan Bank's global trading centre.
Jerome Powell, the chair of the Federal Reserve, gave a hint on Friday that the US central bank is likely to keep raising interest rates and keeping them high to contain inflation.
CR Forex noted in a letter: "The likelihood of the Fed raising rates by 75 basis points in September increased further after the hawkish speech, reaching 70%.