We are expecting a range of 80-82 on USDINR for the next quarter with risk to the upside. RBI cannot allow any appreciation in the rupee as it would remove the competitive edge of the currency and has no alternative but to allow it to weaken over a gradual period of time. The dollar would remain firm in the next few months until Fed announces rate cuts as the economy falls into recession and its target of 2% inflation is achieved.ĬNH at 7.10, KRW at 1410 and IDR at 15025 are all in depreciation mode. The rupee had been an outlier as it had depreciated by only 7.5% till 21st September while till today the depreciation has gone up to 8.5%. The Asian currencies have also remained weak, and most have depreciated by 10-15%. The differential has been putting pressure on the rupee. The Fed continues to remain hawkish on the interest rate front and the interest rate differential between the dollar and rupee has been decreasing slowly from a high of 4.5% in 2022 to 2.9% currently. Oil has been in a comfortable zone for India as it remains below $100 on recession and China slowdown concerns.įoreign portfolio investors (FPIs) who were buyers of equities and sellers of the rupee during September could again turn into sellers which could put additional pressure on the rupee. The rupee looks weak with a trade deficit of $30 billion per month and a CAD of 3.5% to the GDP highest since 2013. The RBI which had been protecting the rupee, not letting it cross 80 levels, suddenly left it and the pair ran to its lowest level of 80.98 on 22nd September and made a new intra-day low on 23rd September 2022 of 81.25. Due to this, the rupee can fall to 83.50 in October itself.The US dollar 2-year yield crossed 4.10% while the 10-year was at 3.50%, resulting in an inverted yield curve which indicated a full-blown recession in the US.Įurope is already reeling under a recession due to the Russia-Ukraine war, gas supply issues and nearly double-digit inflation. Brokerage firm Kotak Institute says that the pressure of rising energy prices and slowing down in the global economy will also be seen on the Indian currency. Experts predict that in the coming days, crude oil prices may increase to $ 100 per barrel, which will increase the pressure on the rupee. The biggest reason for the fall in the rupee will be rising crude oil prices, which will weaken the Indian currency along with increasing the current account deficit. It is estimated that in the next few weeks, the rupee may go to a historic low of 83.50 against the dollar, while if it improves, it will trade around 81.80. The Fed Reserve has also talked about raising interest rates in 2023, which will directly benefit the dollar and the Indian currency will come under pressure again. On Friday, US Fed Reserve Governors Christopher Waller and Lisa Cook said that it is necessary to increase interest rates to bring inflation down.Ĭommodity expert Ajay Kedia says that the rupee will fall further against the dollar. Analysts say that the fall in the US unemployment rate is shocking and it also indicates that the Federal Reserve will continue to increase its interest rates in the future. It is important to note that bond yields and the forex market move in opposite directions.Įxperts believe that in September, American companies have recruited more than expected and the unemployment rate has come down to 3.5 percent. The 10-year bond yield currently stands at 7.483 per cent, up 3 basis points from the previous close. Rising bond yield in the US continues to be a problem for the Indian currency, which has registered a jump in 7 out of 8 sessions. Today around 9 o’clock in the morning, the Indian currency was trading down by about 0.47 percent from its previous closing price, while it had started from a record low of 82.72.Īlso Read – Prices Of Electronics Items Will Increase After Festive Season, Which Items Will Be More Expensive? The biggest reason for this is believed to be the fall in the emerging market and the strict rules of the US Federal Reserve. On Monday, the rupee went down to a new record low of 82.70 against the dollar in the currency exchange market. If the experts are to be believed, then the path of the rupee goes further towards the slope. With the opening of the forex market every day, a new record is created for the fall in the rupee. The Indian currency is continuously falling against the dollar and the pressure on the foreign exchange reserves of the country is increasing. The rupee went down to a new record low of 82.70 against the dollar.
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