Rate cut expectations push rupee to a new low despite falling dollar index

Despite a weaker dollar index and stronger Asian currencies, the rupee depreciated due to stop-loss triggers, said dealers

The rupee depreciated to a new intraday low of 87.49 against the dollar on Wednesday, due to expectations of a 25 basis points (bps) rate cut by the Reserve Bank of India (RBI) this week, before ending the day at a new closing low of 87.46.

 

There was strong dollar demand from importers as a rate cut would put further pressure on the Indian unit.

 

The meeting of the RBI’s Monetary Policy Committee (MPC), which sets interest rates, is underway and the outcome will be announced on Friday.

 

Despite a weaker dollar index and stronger Asian currencies, the rupee depreciated