RBI Intervenes To Steady Rupee After It Breached 80 Per Dollar

RBI helps Indian rupee steady after striking record low seven sessions in a row

India’s central bank intervened in the currency market on Tuesday to help the rupee steady slightly after the unit weakened to 80.05 per dollar, notching a record low for a seventh successive session.

A recovery in Indian shares also favored the rupee.

Like most Asian currencies, the rupee has been falling in recent months as risk aversion has risen on expectations of the US Federal Reserve raising rates aggressively to curb high inflation and prompting investors to flee riskier assets.

The U.S. dollar too hovered just above a one-week low reached overnight versus major peers as markets reduced the odds of a percentage-point Federal Reserve rate hike this month.

The partially convertible rupee recovered from the low struck earlier to trade at 79.91/92 per dollar by 0536 GMT compared to its close of 79.97 on Monday.

“The rupee is going to weaken further, that is a given. But how soon and how much will depend on the RBI,” a senior trader at a private bank said.

The Reserve Bank of India has been intervening in both the spot and forwards markets to slow the rupee’s fall and has taken several measures in recent weeks to boost foreign fund inflows.

But, traders said the rupee was being hurt by a severe dollar shortage and expectations that India’s current and trade account deficits will continue to widen.

While a recovery in Indian share markets on Tuesday helped stabilise the rupee, traders warned it could be just a temporary respite.

So far in 2022, foreign investors have made net sales of India shares totalling more than $30 billion, and traders said unless this trend reverses, the downward bias on the rupee would continue.

India’s benchmark 10-year bond yield rose too, and was trading at 7.46% compared to previous close of 7.44% tracking a rise in US treasury yields. 

For all the latest Sports News Click Here 

Read original article here

Denial of responsibility! Technocharger is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Comments are closed.