The Indian rupee, swaying through multiple headwinds, tiding over global trade disruptions and massive foreign fund outlfows, is unlikely to arrest its descent until tariff impact overhangs, notwithstanding robust domestic macroeconomic tailwinds. The Reserve Bank of India (RBI), which sees the rupee's depreciation as a silver bullet to offset the tariff shock, expects the currency to find its stable course once India reaches a trade deal with its largest trading partner, the US.
So far this year, the rupee has fallen by 4.2 per cent, the worst among its Asian peers.
The rupee tumbled 3 per cent against the US dollar in 2024 as concerns over slower economic growth and a stronger greenback in global markets weighed, but it was among the least volatile currencies in the world and the headwinds may be less intense in the coming year.
Gold prices tumbled by Rs 3,350 to Rs 72,300 per 10 grams in the local market in New Delhi on Tuesday amid subdued demand by jewellers after the government announced the customs duty cut on the yellow metal and silver to 6 per cent.
In response to the tragic incident, many committees scaled back their celebrations significantly.
Gold, a safe-haven bet, is likely to continue its record-smashing journey in the New Year, rising to Rs 85,000 per 10 grams and even Rs 90,000 level in domestic markets if geopolitical tensions and global economic uncertainties continue.
The rupee depreciated by 9 paise and settled at its all-time low level of 83.13 against the US dollar on Wednesday, weighed down by a surge in crude oil prices and strong American currency. Forex traders said the Indian rupee depreciated as the US dollar rose to the highest levels in six months. Moreover, elevated crude oil prices also weighed on rupee.
The country's foreign exchange reserves crossed the $600 billion mark for the first time after increasing by $6.842 billion in the week ended June 4, RBI data showed on Friday. The reserves surged to a record $605.008 billion in the reporting week, helped by a rise in foreign currency assets (FCA), a major component of the overall reserves, as per weekly data by the Reserve Bank of India (RBI). In the previous week ended May 28, 2021, the reserves had swelled by $5.271 billion to $598.165 billion.
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Rupee ends flat after hitting 9-1/2 month low.
After selling dollars for the past few months, the Reserve Bank of India (RBI) may take a hands-off approach before its annual account closing by not trying to prop up the rupee as geopolitical tensions show signs of stabilising with global crude oil prices easing from its $140 peak. The central bank was a net buyer of dollars between April and September, and then turned a net seller in the following months, the data released by the RBI showed. The RBI continued to be a net buyer of $36.6 billion in this fiscal year - between April and January. In 2020-21, it purchased $68 billion on a net basis.
Increased demand from oil importers for the American currency kept pressure on the rupee
The Fed's decision on tapering its monthly $85 billion bond-buying programme is expected later on Wednesday.
If there was one event that made the month of August stand out, it was a strengthening of the dollar index to levels last seen only 20 years ago, as the Federal Reserve dispelled all doubts about its intention to continue raising interest rates. Predictably, most currencies suffered against the US unit, with the bulk of the losers belonging to the emerging markets pack. Amid the volatility, the rupee, however, has displayed significant resilience and fared much better than most of its peer currencies.
The rupee had gained seven paise to close at 61.15 on Friday on suspected RBI intervention in the forex market.
Forex dealers said apart from month-end demand for the American currency from importers, dollar's gains against other currencies overseas amid US data showing more-than-expected economic growth in the second quarter also put pressure on the local unit.
Forex dealers said besides fresh demand from importers for the American unit, a lower opening in the domestic equity market as well as decline in industrial production growth to 4-month low of 0.5 per cent in July, put pressure on the rupee.
The reserves rose to $501.70 billion helped by a whopping rise in foreign currency assets, the latest data from the Reserve Bank of India.
RBI will review the monetary policy again on September 29.
The rupee appreciated further on Thursday, adding 106 paise to 66.01 against the dollar, after steps taken by new Reserve Bank of India Governor Raghuram Rajan to attract US currency inflows boosted market sentiment.
The rupee on Wednesday snapped its two days of losses and edged up two paise to end at 59.27 against the dollar following late selling of the US currency by exporters.
Experts believe it can touch 63 against the dollar
The BJP could win only 16 out of 57 seats where Shah campaigned.
The rupee appreciated by 0.27 per cent in June against the dollar.
The view among the regulator and the government is that the currency is overvalued
May touch 64/$ due to foreign flows slowing down
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The rupee's stability in the last 12 to 18 months made corporates reduce hedging
The division bench said it deemed it appropriate to stay the special court's order and direct that the "accused person shall be treated to be in judicial custody till further orders".
Bengal ministers Firhad Hakim and Subrata Mukherjee were taken to the Central Bureau of Investigation office on Monday in connection with the Narada sting operation, officials said.
India's foreign exchange reserves are at an all-time high.
Sharp swings likely in equity, forex and bond markets.
Increased demand from oil importers for the American currency and a weak opening in the domestic stock market also put pressure on the rupee.
Senior advocate Kapil Sibal, appearing for the state, told a bench comprising Justices Vineet Saran and Aniruddha Bose that whenever there is an allegation that a probe is not being carried fairly, the court takes the facts into account and then transfers the case to CBI after a prima facie conclusion.
A division bench of justices Biswanath Somadder and A Mukherjee said the government's silence on the permission is 'astonishing and astounding'.
The Bharatiya Janata Party decided to put on hold Shah's proposed rally and the Rath Yatra, saying it will wait for the final order from the high court, which will now hear an appeal by the saffron party on Friday morning.
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