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More wiggle room left for Rupee to strengthen

The rupee closed at 65.41 a dollar, strengthening as much as 65.22 a dollar in the intraday

Anup Roy  |  Mumbai 

More wiggle room left for Rupee to strengthen

The Indian scaled back from its day’s high amidst heavy intervention by the Reserve Bank of India (RBI) but still closed higher than its previous close.

The has been appreciating since the market opened on Tuesday, reflecting the Uttar Pradesh election victory by the Bharatiya Janata Party. 



The closed at 65.41 a dollar, strengthening as much as 65.22 a dollar in the intraday. Rupee’s closure is strongest since October 2015. 

But is not alone in strengthening against the dollar in the past few days. All Asian currencies have strengthened, even as rupee’s 3.5 per cent movement is the strongest in the past three trading session. 

However, on a five trading session basis, the has appreciated two per cent, whereas won has strengthened 2.3 per cent, highest in Asia. Year-to-date won has strengthened 6.516 per cent, whereas has strengthened 3.847 per cent, largely in line with its Asian peers. 

The dollar index, which measures dollar’s strength against major global currencies, fell 0.27 per cent after the Fed rate hike to 100.47 per cent, pushing all Asian currencies up. 

Back home, foreign banks are cutting down their long dollar positions aggressively as the strengthens rapidly. Stop losses are getting triggered as breaches key technical level. However, the has entered the market with heavy buying of dollars through nationalised banks, said currency dealers. 

The RBI’s intervention ensured that scaled back from its day’s high position to close about 20 paise weaker. A sharp rise in is bad for the export sector and economists say the central bank would unlikely want to let the appreciate in a huff.

“The appreciation, we feel is not sustainable and would revert to the range of 66-66.5 range, to begin with as the fundamentals do not warrant such unbridled enthusiasm. The outcome of the Elections has been the main driving force. A strong may not be good for our exports and the is cognizant of the same,” said in a report. 

Currency market participants largely concur with the view.

“There is still some upside left for the rupee, but it should settle at around 64.5-65 level in the short-term,” said Aman Mahna, a currency dealer at First Rand Bank. According to Mahna, March end profit booking would ensure that goes through some correction in its value.

However, some expect rupee’s strength to continue beyond March. Satyajit Kanjilal, head of Forexserve expects the to strengthen as much as 63 a dollar by June.

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More wiggle room left for Rupee to strengthen

The rupee closed at 65.41 a dollar, strengthening as much as 65.22 a dollar in the intraday

The rupee closed at 65.41 a dollar, strengthening as much as 65.22 a dollar in the intraday The Indian scaled back from its day’s high amidst heavy intervention by the Reserve Bank of India (RBI) but still closed higher than its previous close.

The has been appreciating since the market opened on Tuesday, reflecting the Uttar Pradesh election victory by the Bharatiya Janata Party. 

The closed at 65.41 a dollar, strengthening as much as 65.22 a dollar in the intraday. Rupee’s closure is strongest since October 2015. 

But is not alone in strengthening against the dollar in the past few days. All Asian currencies have strengthened, even as rupee’s 3.5 per cent movement is the strongest in the past three trading session. 

However, on a five trading session basis, the has appreciated two per cent, whereas won has strengthened 2.3 per cent, highest in Asia. Year-to-date won has strengthened 6.516 per cent, whereas has strengthened 3.847 per cent, largely in line with its Asian peers. 

The dollar index, which measures dollar’s strength against major global currencies, fell 0.27 per cent after the Fed rate hike to 100.47 per cent, pushing all Asian currencies up. 

Back home, foreign banks are cutting down their long dollar positions aggressively as the strengthens rapidly. Stop losses are getting triggered as breaches key technical level. However, the has entered the market with heavy buying of dollars through nationalised banks, said currency dealers. 

The RBI’s intervention ensured that scaled back from its day’s high position to close about 20 paise weaker. A sharp rise in is bad for the export sector and economists say the central bank would unlikely want to let the appreciate in a huff.

“The appreciation, we feel is not sustainable and would revert to the range of 66-66.5 range, to begin with as the fundamentals do not warrant such unbridled enthusiasm. The outcome of the Elections has been the main driving force. A strong may not be good for our exports and the is cognizant of the same,” said in a report. 

Currency market participants largely concur with the view.

“There is still some upside left for the rupee, but it should settle at around 64.5-65 level in the short-term,” said Aman Mahna, a currency dealer at First Rand Bank. According to Mahna, March end profit booking would ensure that goes through some correction in its value.

However, some expect rupee’s strength to continue beyond March. Satyajit Kanjilal, head of Forexserve expects the to strengthen as much as 63 a dollar by June.
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Business Standard
177 22

More wiggle room left for Rupee to strengthen

The rupee closed at 65.41 a dollar, strengthening as much as 65.22 a dollar in the intraday

The Indian scaled back from its day’s high amidst heavy intervention by the Reserve Bank of India (RBI) but still closed higher than its previous close.

The has been appreciating since the market opened on Tuesday, reflecting the Uttar Pradesh election victory by the Bharatiya Janata Party. 

The closed at 65.41 a dollar, strengthening as much as 65.22 a dollar in the intraday. Rupee’s closure is strongest since October 2015. 

But is not alone in strengthening against the dollar in the past few days. All Asian currencies have strengthened, even as rupee’s 3.5 per cent movement is the strongest in the past three trading session. 

However, on a five trading session basis, the has appreciated two per cent, whereas won has strengthened 2.3 per cent, highest in Asia. Year-to-date won has strengthened 6.516 per cent, whereas has strengthened 3.847 per cent, largely in line with its Asian peers. 

The dollar index, which measures dollar’s strength against major global currencies, fell 0.27 per cent after the Fed rate hike to 100.47 per cent, pushing all Asian currencies up. 

Back home, foreign banks are cutting down their long dollar positions aggressively as the strengthens rapidly. Stop losses are getting triggered as breaches key technical level. However, the has entered the market with heavy buying of dollars through nationalised banks, said currency dealers. 

The RBI’s intervention ensured that scaled back from its day’s high position to close about 20 paise weaker. A sharp rise in is bad for the export sector and economists say the central bank would unlikely want to let the appreciate in a huff.

“The appreciation, we feel is not sustainable and would revert to the range of 66-66.5 range, to begin with as the fundamentals do not warrant such unbridled enthusiasm. The outcome of the Elections has been the main driving force. A strong may not be good for our exports and the is cognizant of the same,” said in a report. 

Currency market participants largely concur with the view.

“There is still some upside left for the rupee, but it should settle at around 64.5-65 level in the short-term,” said Aman Mahna, a currency dealer at First Rand Bank. According to Mahna, March end profit booking would ensure that goes through some correction in its value.

However, some expect rupee’s strength to continue beyond March. Satyajit Kanjilal, head of Forexserve expects the to strengthen as much as 63 a dollar by June.

image
Business Standard
177 22