Connect with us

Business Insights

Indian Rupee Shows Stability Amidst Dollar’s Strength in Global Market

The Indian rupee traded in a limited range against the US dollar early Wednesday, impacted by weak domestic equity activity.

The Indian rupee exhibited a narrow trading range against the US dollar early on Wednesday, influenced by subdued activity in domestic equities and the robust performance of the American currency in international markets.

Sustained outflows of foreign funds further impacted investor confidence, contributing to the rupee’s stable yet cautious performance.

Rupee’s Initial Performance:

At the interbank foreign exchange, the rupee commenced at 83.25 (Dh22.68) against the dollar, reaching an early high of 83.23, marking a modest 4 paise gain from its previous close.

Analysts noted a potential shift in the currency market dynamics, suggesting that major central banks completing their policy tightening cycles might reduce pressure on the Reserve Bank of India (RBI) to intervene significantly.

RBI’s Intervention Strategy:

RBI Governor Shaktikanta Das defended the regular use of the country’s $586 billion foreign exchange reserves, emphasizing the necessity to prevent excessive volatility. The central bank sold approximately $23 billion over the last four months.

Anticipated Decrease in Intervention:

Most strategists (16 out of 23) predicted a decrease in RBI intervention over the next year, especially if there is a reversal in capital flows and a clearer picture emerges regarding the Federal Reserve’s rate trajectory.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *