Even as most Asian currencies took a beating as investors turned to safe havens after higher-than-expected inflation data in the US, the Indian rupee is performing marginally better than them. However, the rupee has touched an all-time low, breaking the level of 78 against the dollar.
After touching the level of 78.28 during the trading session, the rupee finally settled at 78.04 per dollar while the previous closing price stood at 77.84.Â
The rupee lost 0.25 percent against the dollar, while other Asian currencies such as the South Korean won by 1.22 percent, the Indonesian rupee lost by 0.9 percent, and the Philippines money percentage dropped by 0.6.Â
Kotak Securities VP says:
Anindya Banerjee, Vice President (Currency Derivatives & Interest Rate Derivatives) Kotak Securities said, “There is a possibility of RBI intervention, both in the spot and the forward. Due to such alleged interference, today the rupee is one of the strongest currencies in the world.
Banerjee said, in the coming times (till the Fed meeting on Wednesday), there may be a lot of pressure on the dollar versus the rupee. An interesting hike of 75 basis points is positive for the US dollar. However, we feel that the RBI will rein in this growth. In the short term, we are seeing a range of 77.90 to 78.40 in the spot market.
Business Standards and other agencies
https://hindi.business-standard.com/storypage.php?autono=188031 (Refer to this article in Hindi as well)
According to Business Standard’s opinion, the rupee may remain sideways in the short term and it may not see a sharp decline as the RBI may continue to support through dollar purchases.
IFA Global CEO Abhishek Goenka said, “Indian rupee reacted due to global risk, although its momentum was satisfactory due to RBI’s move.” Otherwise, global currencies have weakened significantly against the dollar.
Goenka said, we can see weakness in this if oil remains above 120 and the global risk sentiment does not improve. The prospect of recession in America is getting stronger every day.
RBI TALKS about Dollar!
The central bank may continue to intervene in the foreign exchange market, but the rupee may remain under pressure as Brent crude trading near $ 120 along with weak fundamentals has raised concerns about a trade deficit of 3.5 percent.
The rupee started depreciating sharply after Russia attacked Ukraine in February. The Reserve Bank of India is aggressively intervening in the foreign exchange markets and is trying to slow down the pace of this decline.
RBI Governor Shaktikanta Das had said that the central bank will not allow its currency to fall sharply, adding that the central bank does not have any specific level of the target.
Foreign Exchange Comments!!
Amit Pabari, Managing Director, CR Forex said, “Weak fundamentals are weighing on the rupee and Brent crude is nearing $120 a barrel, which is likely to widen the trade deficit.” At the same time, rising interest rates and capital outflows are raising concerns in the US.
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