The rupee hit a new all-time low against the dollar, marking the third straight session of record low levels breached, plunging well past 81.50 per dollar on Monday as the greenback rose sharply to multi-year highs against most major currencies on fears of a global recession from the rising borrowing rates worldwide.
Interest rate hikes in the United States and an aggressive policy stance by the Federal Reserve forced a dozen other nations to do so last week, underscoring global economic slowdown risks, which has led to the onslaught of relentless sell-off in global financial markets and a dollar rally.
The dollar rally is also a reflection of investors increasing flight-to-safety bets as Asian markets risk experiencing crisis-level stress again, as two of the most significant currencies in the region have collapsed under the assault of unrelenting dollar strength - the yen and the yuan.
If the decline in the currencies of the two largest economies in the region causes foreign investors to withdraw money from Asia, a full-fledged crisis could develop.
The pound led declines among major currencies Monday, slumping to a record low, and the euro wobbled to a two-decade low at $0.9660 as war risks escalated in Ukraine before steadying at $0.9696.
"It's a king US dollar -- we've been seeing currencies across Asia come under pressure," Sian Fenner, senior Asia economist for Oxford Economics, said on Bloomberg TV.