After regulators in India, including the nation’s central bank, took action to try and limit the currency’s volatility the Rupee rebounded from recent record-lows against the US Dollar.
The US Dollar to Indian Rupee Exchange Rate was in the region of 59.8050 as of 14:20 GMT
Emerging market and commodity-driven currencies benefited from increased risk appetite and a slighter softer US Dollar in the run up to Federal Chairman Ben Bernanke’s long awaited announcement.
After pushing below the psychological 60 Rupee per Dollar level the Indian currency held steady against its American counterpart.
The US Dollar to Rupee Exchange Rate is hit a low of 59.6350
The Rupee also strengthened against the Pound and Euro.
Yesterday the Reserve Bank of India banned banks from proprietary trading in Rupee options and futures, while the Securities and Exchange Board of India doubled the margin requirement on the domestic USD/INR forward trade.
Now reports have emerged that the RBI has requested that state-run oil companies buy Dollars from a single bank, as by limiting the number of people who know that oil companies are seeking the ‘Greenback’ Rupee volatility could be tempered.
Some analysts have questioned the success of these measures, and implied that the government’s time would be better spent working on a way of financing its current account deficit (which is at a record high) whilst concerns of a significant selloff by foreign investors mount.
However, Indian bonds due in 2022 were able to climb today as the Rupee’s gains calmed fears relating to accelerating inflation.
One Mumbai based industry expert stated: ‘A steady currency would definitely provide comfort to bond markets, but it’s too early to say the Rupee has stabilised. Data showing foreign funds were net buyers of foreign debt is also positive.’
The efforts of India’s regulators may well come to nothing if the Fed Chairman offers a timeframe for tapering easing later today. Any indications that the US central bank is willing to scale down its level of bond buying in the months ahead could see the US Dollar climb and emerging market currencies tumble.
Current Rupee (INR) Exchange Rates
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 89.0676 <
The Euro/Indian Rupee Exchange Rate is currently in the region of: 76.6461 <
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 59.8050 <
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 54.9847 <
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 46.9529 <
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 56.8750 <
(Correct as of 14:20 GMT)
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