Yesterday the Rupee was able to consolidate gains against a softening US Dollar as a result of Federal Reserve easing speculation. However, although Fed Chairman Ben Bernanke still erred on the side of caution in his announcement yesterday the Rupee has weakened slightly against its American counterpart.
The ‘Greenback’ was able to post modest advances against several of its most traded rivals prior to the release of influential US employment data. Economists are expecting today’s initial jobless claims figures to show improvement in the US labour market. Ben Bernanke is also due to deliver his semi-annual policy report to the senate.
The US Dollar to Indian Rupee Exchange Rate was in the region of 59.6000 as of 12:55 GMT
Meanwhile, over in India the nation’s Reserve Bank is selling off roughly 2 billion Dollars worth of government bonds in order to bolster the flagging Rupee.
But despite the central bank’s attempts to tame the currency’s volatility in recent weeks, top ratings agency Moody’s Investor Service has today stated that the Rupee’s decline will worsen existing fiscal and inflationary pressures, putting India’s sovereign rating on the line.
India currently holds a stable outlook on a Baa3 rating.
Moody’s stated: ‘India’s recent measures to prop up the Rupee may limit exchange rate volatility to some degree but a sustained reversal in the Rupee would require a significant narrowing of the trade deficit or large capital flows.’
However, the ratings agency did add: ‘Given the subdued global outlook and price inelasticity of some major imports, depreciation is unlikely to accelerate export growth or curb import growth significantly in the near term.’
At the same time, several major financial institutions have voiced concerns over the steps the reserve bank has taken in its attempts to stabilise the Rupee.
The US Dollar to Rupee Exchange Rate hit a low of 59.2400
For example, Bank of America Merrill Lynch asserted: ‘We continue to believe that the RBI will have to recoup foreign exchange reserves, rather than hike rates – to restore confidence in the Rupee.’
BofA-ML also noted that the central bank will find it difficult to protect the Rupee at the level of 60 per Dollar.
Current Rupee (INR) Exchange Rates:
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 90.6298 >
The Euro/Indian Rupee Exchange Rate is currently in the region of: 78.0117 >
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 59.6000 >
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 54.6413 <
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 46.9730 >
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 57.2265 >
(Correct as of 09:50 GMT)
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