As the US Dollar posted modest, but widespread, declines ahead of Federal Reserve Chairman Ben Bernanke’s announcement and the publication of minutes from the FOMC’s latest policy meeting, the Rupee was able to move away from the fresh record low recorded yesterday.
The US Dollar to Indian Rupee Exchange Rate was in the region of 60.2700 as of 12:20 GMT
The Indian currency also benefited from the news that regulators took steps to restrain the Rupee’s volatility.
According to the Reserve Bank of India, the central bank barred banks from proprietary trading in exchange-traded options and currency futures.
This news, coupled with a separate announcement from the Securities and Exchange Board of India regarding raising margin requirements, allowed the Rupee to climb by 0.8 per cent against the US Dollar, its most significant gain this month.
According to strategist Irene Cheung: ‘The tightening of derivative trading, coupled with potential measures to curtail the impact of oil-related Dollar demand, could provide a reprieve to the Rupee. That said, we continue to see the Rupee under severe pressure, as Fed quantitative-easing tapering could continue to trigger capital outflows from India.’
Similarly an economist with Goldman Sachs observed: ‘The global environment is quite difficult for current account deficit countries with significant external financing needs […] India is in the line of fire at the moment and that is why the authorities are likely to have to do a lot more of the things they have done this week.’
The US Dollar to Rupee Exchange Rate is hit a low of 59.4800
The Rupee is expected to experience significant volatility in reaction to tomorrow’s US news. If a more comprehensive picture of the timeline for tapering easing is painted by the Federal Reserve emerging market and commodity-driven currencies could be hit hard.
The main pieces of Indian economic data due for publication this week, industrial production and balance of trade figures, are due out on Friday.
Current Rupee (INR) Exchange Rates
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 89.5406 >
The Euro/Indian Rupee Exchange Rate is currently in the region of: 77.4298 >
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 60.2700 >
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 55.1379 >
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 47.3910 >
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 57.0330 >
(Correct as of 12:20 GMT)
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