The Indian Rupee has weakened against the US Dollar and the majority of its most traded peers due to investor worries that the potential tapering of US stimulus measures will quicken outflows from the Indian economy.
If tapering does occur then the Rupee will be exposed to its record high current-account deficit as investors withdraw their cash from the country as they search for higher yields elsewhere, which will most likely be the US Dollar.
Thursday’s comments by Fed Chairman Ben Bernanke sent the Rupee lower against its peers after he took steps to reassure investors that even as the Federal Reserve considers a reduction to its massive asset purchasing programme it has not changed its accommodating policy.
In early trading the Rupee declined by 0.2% against the US Dollar.
“The Rupee’s outlook depends a lot on global factors at the moment as the uncertainty over QE3 is not over. The rise in oil prices remains a concern. If Dollar/Rupee breaks below 58.80, it can gain to mid- to lower-58 levels,” said Pramit Brahmbhatt, chief executive at Alpari Financial Services India
Since Bernanke first hinted about tapering the Rupee has fallen in ten out of eleven weeks.
It may claw back today’s decline before the market shuts as investors speculate policy makers will take steps to curb the currency’s slide, according to FirstRand Ltd.
“We don’t expect much Rupee strength considering the global scenario,” said Paresh Nayar head of currency and money markets at the Indian unit of FirstRand in Mumbai. “The Rupee is likely to stay in a close range.”
Current Rupee (INR) Exchange Rates
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 91.0294 <
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 59.7255 >
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 54.7797 >
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 47.4233 >
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 57.5133 >
(Correct as of 12:25 PM GMT)
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