Despite the Reserve Bank of India urging local investors to refrain from buying gold in an attempt to halt the currency’s decline, the Rupee fell against the US Dollar for a third day as the American currency was supported by stronger-than-anticipated domestic factory order figures.
The US Dollar to Indian Rupee Exchange Rate was in the region of 60.1870 as of 10:35 GMT
Concern that foreign investors will continue to turn away from local assets, increasing the risks associated with a record-current account deficit, also wore on the Rupee ahead of the publication of Friday’s influential US employment figures.
In response to the Rupee’s movement Mumbai-based industry expert Naveen Raghuvanshi commented: ‘The outflows are a concern, we are seeing demand for Dollars from foreign banks. The Reserve Bank of India may intervene to support the Rupee.’
The USD/INR exchange rate hit a high of 60.4410
Yesterday the RBI released draft guidelines advising banks of how to monitor businesses’ unhedged foreign-exchange exposure, and recommending including this risk in the cost of lending.
However, the Economic Times published an interview with Senior Fund Manager Killol Pandya on the short-term future of the Rupee in which Pandya asserted that the Rupee’s weakness is likely to continue.
Killol Pandya asserted: ‘The Rupee has seen a considerable amount of weakening. It is unlikely that the Rupee will reverse gear. To some extent, we are facing a double whammy. Our macros are dictating a weakening in the currency. Moreover, we have a strengthening Dollar. Therefore, it is exacerbating the movement which the Rupee is experiencing’.
In reference to the Indian central bank Killol Pandya added: ‘We must also factor in the fact that incrementally RBI has continuous less elbow room to intervene […] We cannot hope for any strong or aggressive intervention from RBI. Therefore, the outlook for Rupee continues to be weak. I am still holding significant doubts whether Rupee will end up seeing the levels of 70 against the Dollar in the foreseeable future. However, there are chances that the Rupee will continue to weaken going ahead.’
If this afternoon’s US trade balance and initial jobless claims figures exceed expectations, increasing the odds of the Federal Reserve tapering stimulus and lessening the appeal of emerging-market assets, the Rupee could weaken further.
The Rupee also declined against a broadly strengthening Pound following the release of stronger-than-forecast UK services PMI.
Current Rupee (INR) Exchange Rates
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 91.7789 >
The Euro/Indian Rupee Exchange Rate is currently in the region of: 77.9174 >
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 60.1870 >
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 54.6202 <
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 46.6025 >
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 57.1896 >
(Correct as of 10:35 GMT)
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