The Indian Rupee jumped to a five week high against the US Dollar after the Indian Central Bank took action to tighten the nation’s supply of cash and to halt the slide in the currency.
Since July 23rd the Rupee has advanced by 1.5% as the Indian Central Bank restricted access to funds. The RBI capped the amount of cash lenders can borrow in daily repurchase auctions at 0.5% of their deposits. The Bank also raised the daily balance requirement for lenders cash reserves and announced the auction of 60 billion Rupees worth of cash-management bills.
“Recent measures announced by the RBI to curb liquidity and stabilize the rupee are likely to provide some support,” L. Subramanian, an analyst at ICICI Bank Ltd. in Mumbai, wrote in a report today. Increased speculation the Fed will taper had weighed on the Indian currency, he wrote.
That speculation has eased in recent days after several Federal Reserve officials said that they want to see more signs that the employment, housing and manufacturing markets in the United States are making firm improvements. Until then they hinted that they would not recommend an immediate scale back of the Feds quantitative easing programme.
Economists are warning that despite the RBI’s actions the Rupee is still likely to weaken.
“As money-market liquidity tightens, the cost of carrying a speculative position in anticipation of further Rupee weakness increases significantly. While the current moves should push short-term interest rates higher and make foreign exchange speculation costlier, we don’t think that such speculation is the key driver o current Rupee weakness. Accordingly, we do not gain much confidence that these measures will effectively curb pressures on the Rupee” economists at Barclays Plc, including Siddhartha Sanyal in Mumbai said.
Current Rupee (INR) Exchange Rates
The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 90.5793
The Euro/Indian Rupee Exchange Rate is currently in the region of: 77.9427
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 58.9671
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 53.9472
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 47.2037
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 57.1972
(Correct as of 15:00 pm GMT)
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