Although the majority of the Reserve Bank of India’s efforts to restrain Rupee volatility over the last few months have had little effect, since Raghuram Rajan became the central bank’s new Governor the currency has been enjoying something of a rebound.
The US Dollar to Indian Rupee Exchange Rate was in the region of 64.1450 as of 10:45 GMT
After hitting a series of historic lows over the last few weeks, the Rupee has been able to strengthen to a two-week high against its US counterpart after recovering 3.5 per cent in three days. Some industry experts are expecting that the currency will appreciate to 63 per Dollar by Friday.
The impact the measures outlined by the new RBI chief have had on the Rupee has been termed the ‘Rajan effect’ by analysts.
As treasurer Harihar Krishnamoorthy observes; ‘The Rupee will continue to be strong. It was already in the overshoot turf. The measures announced by the RBI have come as a catalyst.’
The US Dollar to Rupee (USD/INR) exchange rate hit a low of 64.0800
Other factors positively influencing the Rupee include last week’s disappointing US employment figure and the possibility of a diplomatic solution preventing a US strike on Syria.
With the US economy failing to add the number of positions expected in August the likelihood of the Federal Reserve tapering stimulus this month declined and emerging-market assets were supported.
The Rupee has also posted notable gains against the Pound and Euro.
While the ‘Rajan effect’ is expected to carry the Rupee forward over the next few days, it may well wear off if local data reminds investors of the extent of the issues the new RBI Governor has to overcome. Consequently, the Rupee could fluctuate in response to Thursday’s industrial production and inflation figures for India.
News from the US will remain a key investor focus ahead of the next Federal Open Market Committee policy meeting.
Current Rupee (INR) Exchange Rates:
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 100.7330 <
The Euro/Indian Rupee Exchange Rate is currently in the region of: 85.2825 <
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 64.1450 <
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 59.3996 <
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 51.4627 <
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 61.8981 <
(Correct as of 10:45 GMT)
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