The rupee on Monday closed at In the midst of all the positive factors that favour the defiant bulls, a bigger challenge for them may be emerging from the dollar bulls as the rupee is slowly weakening and staring at a breakdown point.
At the interbank foreign exchange market, the local currency opened at 75 and witnessed an intra-day high of The domestic currency on Thursday settled at Forex traders said the broad weakness of the American currency in the overseas market and sustained foreign fund inflows supported the local unit, while firm crude oil prices restricted the gains.
The domestic currency on Wednesday edged closer to At the interbank foreign exchange market, the local currency opened on a weak note and witnessed an intra-day high of The rupee on Monday, settled at The Indian currency had opened the day at The rupee on Thursday settled at The domestic currency had opened at At the interbank foreign exchange market, the local currency opened at The noise about a correction in the global equity market has become louder post the indication about a move towards policy normalisation by the FOMC in its last monetary policy meeting.
At the interbank foreign exchange market, the rupee opened on a weak note at For a brief period, it ventured into positive territory and touched a high of It is clearly evident that the inherent nature of the Indian Rupee has been to depreciate against the dollar with intermittent corrections and will continue to be so.
The major reason for this is the age-old fact that a high inflation rate will continue to reduce the value of any currency; Indian inflation rates like most emerging market economies have been higher than that of the US. It touched an intra-day high of At the interbank forex market, the local unit opened flat at During the session, the domestic unit witnessed an intra-day high of The broader gains in equities have not been able to lift the Indian rupee higher.
Nifty has been a clear outperformer, rising by almost 13 per cent from June 1, to date. Antithetical to this, the rupee has depreciated 0. At the interbank foreign exchange, the rupee opened at Investors unwound their bearish bets on the Indian rupee to be slightly bullish for the first time since mid-June, with the currency appreciating 0.
On Tuesday, the rupee had settled at At the interbank foreign exchange, the domestic unit opened at At the interbank foreign exchange market, the domestic currency opened at At the interbank foreign exchange market, the rupee opened strong at It hovered in a range of At the interbank foreign exchange, the rupee opened lower at The local unit also witnessed a low of On Thursday, the rupee had settled at The increase in foreign kitty in the reporting week was mainly on the back of a rise in the value of foreign currency assets FCA held by the central bank even as the value of gold reserves held by RBI fell.
The rupee also touched At the interbank forex market, the local unit opened slightly up at At the interbank foreign exchange, the domestic unit opened lower at The rupee opened on a marginally positive note at It hovered in the range of On Tuesday, the rupee strengthened by 19 paise to end at At the interbank foreign exchange, the domestic unit opened on a flat note at The local unit also touched a low of At the interbank forex market, the rupee opened at The local unit finally settled at At the interbank forex market, the domestic unit opened at On Friday, the rupee had settled at CBDC could be linked to e-wallets and the UPI payment infrastructure and also possibly bank accounts, offering the end-user the best of both -- security sovereign issuance and convenience offered by new age fintechs.
The partially convertible rupee was trading at The rupee finally ended at Nifty 18, Zomato Ltd. Market Watch. ET NOW. Brand Solutions. Video series featuring innovators. ET Financial Inclusion Summit. According to experts, the rupee's downward slide is expected to continue through the current quarter with some predicting that it could slip below the 76 mark in the coming weeks.
The remarkable decline in the currency's value has turned it from Asia's best-performing currency in the previous quarter to its worst. The decision of the RBI to maintain a 'dovish' stance and infuse liquidity into the market via its bond program weaned away the rupee's strength as the central bank sought to sustain an economic recovery which has now been cast into doubt in light of the resurgence of the virus.
That, of course, isn't the only reason for the rupee's slide though. FPI outflows have also, in the view of most experts, placed additional pressure on the currency. However, over the course of April alone, they have already pulled out a net Rs 2, crores, reflecting the change in sentiment on the back of the country's dire COVID growth rate. On Thursday, India, for the very first time, breached the 2-lakh mark in daily infections, having only recently surpassed Brazil to become the second-hardest hit country in the world.
While several states continue to reel from the resurgence, Maharashtra, now recording over 60, fresh cases daily, is, largely, fuelling it. The state, which is home to the nation's financial capital, has now imposed 'lockdown-like' restrictions till May 1 as it struggles to contain the spread of the virus.
Right now, based on recently released record level US economic data supports a strong bullish view on the US dollar index. Based on the above fact, expectations were rising that Rupee will depreciate but probably RBI along with slight fall in USD helped Rupee to regain its losses for a while.
To evaluate better, let us understand the factors which can have an impact on the rupee going ahead. Summer Sell Seasonality for Rupee: Historically, we have seen that May remains a depreciating month for the rupee in over the last decade; where the Rupee has depreciated 9 out of 10 times in the month of May.
Hence seasonality effect can play its role to trigger more depreciation. Historically, we have seen that May remains a depreciating month for the rupee in over last decade Looming worry creates nervousness in FII: Over the past few weeks, FIIs stopped pushing their flows or in fact withdrew money from equity markets mainly due to higher US bond yields and likely impact of strength in the US dollar.
Adding further fuel, the negative real yields have made buying bonds unattractive pushing away investors from bond market too. On other hand, exports dipped by Further, the government fiscal plan for FY22 likely to fall short as the budget was made with an expectation of the situation at that time; means COVID second wave was not considered.
Hence, India could experience a twin deficit issue again in FY A widening both deficit remains a matter of concern as it could lead to devaluation of the rupee. Probably she was checking the impact of hawkish tone. However, a record jump in economic growth and other economic data will put pressure on the Fed to come up with tapering and rate hike actions.
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