You are here: Home » Finance » Money & Forex Markets » News
Why are government and regulators uneasy about fintech's rise?
Business Standard

Indian rupee tipped to fall further after reaching record low: Analysts

The Indian rupee is likely to fall further after hitting a record low to the dollar on Thursday as the U.S. Federal Reserve hinted at more aggressive rate hikes to tame inflation

Topics
Indian rupee | Rupee vs dollar | US Federal Reserve

Reuters  |  Mumbai 



Rupee, rupee vs dollar
The rupee opened at a record low of 80.2850 per U.S. dollar, down from 79.9750 in the previous session

The is likely to fall further after hitting a record low to the dollar on Thursday as the U.S. Federal Reserve hinted at more aggressive rate hikes to tame inflation.

The rupee opened at a record low of 80.2850 per U.S. dollar, down from 79.9750 in the previous session.

The Fed raised rates by 75 basis points, in line with expectations. More importantly, it hinted that more hikes were coming and that rates would stay elevated until 2024. Asian currencies opened weaker, with the Chinese yuan slipping below 7.10 to the dollar.

"After the hawkish Fed Reserve commentary, the rupee is (set to fall)", said Anil Bhansali, head of treasury at Finrex Treasury Advisors.

"The intervention from the central bank will remain crucial and they are expected to be present through the day. However, they may allow a closing for the pair above 80 today." Samir Lodha, managing director at QuantArt Market Solutions, reckoned that more losses were in store for the rupee if the RBI decides to step back.

"Once RBI allows INR to trade beyond 80 on a consistent basis, I expect rupee to head towards 82.0 in a couple of months on account of the trade deficit and due to global recession and money supply tightening," Lodha said.

It is possible that "rupee will depreciate further with RBI intervention to control it whenever required," said Venkatakrishnan Srinivasan, founder and managing partner at Rockfor Fincap.

However, any possible intervention by RBI may be less aggressive this time, said Arnob Biswas, head FX at SMC Global Securities.

"RBI may not be aggressive considering the hawkish side of Fed. On top of that substantial drop in net liquidity in the system may warrant to do so," Biswas said.

Dilip Parmar, research analyst at HDFC Securities, said that "even if the RBI steps in, it will be a temporary support and it cannot change the direction."

Meanwhile, Kunal Sodhani, vice president, global trading center at Sinhan Bank, said "a lot of option sellers may trigger stop losses"

"Needless to say though, it remains quite important to see how RBI action continues from here," Sodhani said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.


We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, September 22 2022. 10:02 IST

RECOMMENDED FOR YOU

.