In worldwide trade, the American dollar traded with solid strength against all major emerging currencies
If net forex outflows turn out to be relatively high in the next few years, the rupee could depreciate beyond Rs 80 to a dollar by 2022. The causal reasons could, for example, include unmet expectations of FPI and FDI investors about the performance of the Indian economy, sharp rise in prices of imported oil and decrease in FX remittances. The RBI has to ask itself whether guaranteeing future rupee-dollar exchange rates on FX forward contracts is a reasonable way to use its risk-bearing capacity, says Jaimini Bhagwati.
Sustained dollar unwinding from exporters and banks amid weak overseas trend gave a boost to the rupee
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Snapping a two-day fall, the rupee opened strong at 59.49 a dollar from the previous close of 59.76 at the Interbank Foreign Exchange Market and then touched a low of 59.59.
The RBI left key policy rates unchanged and cut the GDP growth estimate for this fiscal to 5.5 per cent from 5.7 per cent.
Adequate dollar supply gave a boost to the local currency
Lower IT exports will raise India's dependence on capital flows to fund imports.
However, the hefty initial gains of the rupee, which had jumped to 61.05 intra-day, were substantially erased on month-end demand for US dollars from private oil firms and some defence-related purchases, amid fall in domestic stocks.
The gains were capped due to month-end dollar demand from importers, mainly oil firms
The local currency opened higher at 61.20 a dollar from the previous close of 61.30 at the Interbank Foreign Exchange Market.
'...and defensive until the global macro headwinds turn more benign.'
The RBI has enough "fire power" to deal with the rupee volatility and will intervene in the forex market as and when required, said Planning Commission Deputy Chairman Montek Singh Ahluwalia.
'Through the course of the year, we expect the economic weakness generated by demonetisation will give way to normalisation of growth conditions.'
RBI Governor Raghuram Rajan on Tuesday kept the repo rate unchanged 6.50 per cent.
A weaker rupee might stimulate Indian exports and nullify some of the effects of Chinese devaluation.
The report said forward-looking surveys and economic indicators along with rising business confidence provided hope that the decline in private corporate investment 'could be arrested' in 2014-15 and fresh investments of over Rs 1.2 lakh crore (Rs 1.2 trillion) 'could be realised'.
Unwinding of long dollar positions ahead of the US job data backed the rupee sentiment
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The local currency opened at 62.20 a dollar from the previous close of 61.93 and immediately touched a low of 62.29 at the interbank foreign exchange market.
For the week, the battered rupee gained 26 paise against the greenback
The improvement in the current account deficit is expected to provide a major reprieve to the government and the Reserve Bank of India which have been battling to prop up the rupee.
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Raghuram Rajan, who took over as RBI Governor on September 4, is scheduled to unveil on Friday mid-quarter monetary policy review, an event keenly awaited by industry and banks.
Forex dealers said rebound in domestic stock markets also helped the rupee strengthen against the dollar.
Rupee movement, global cues key for stocks this week: Experts
A fall in the rupee could boost exports. But the flip side of the equation is that a weaker rupee could stoke some inflation
After another day of volatile trade, the rupee today appreciated by seven paise to close at a new one-month high of 59.04 against the dollar as the RBI's liquidity-tightening measures continued to lend support.
Bullish dollar sentiment overseas alongside sluggish domestic equity market predominantly impacted the domestic currency
Citing rising prices, slowdown in growth and depreciation of rupee among the problems facing the economy, the opposition members said in the Lok Sabha that they feared the repeat of the 1991 crisis when the country had to mortgage gold as it failed to meet short-term debt obligations.
Indian rupee appreciated by 35 paise to end at two-week high of 63.03 against the greenback.
The new series claims GDP grew at seven per cent between April and June 2015, while gross value added (GVA) grew at 7.1 per cent.
Foreign investors keeping off; inflows into bonds also likely to improve if RBI resumes rate cuts.
Economist Arvind Panagariya tells Suman Guha Mozumder that the rupee is doing a much-needed clean-up job, raising exports and cutting imports.
The 30-share Sensex closed at 27,112 up by 481 points whereas the Nifty ended higher by 139 points at 8,115.
There are some advantages of a falling rupee.
China's domestic debt is a major concern.
The govt would also be coming out with more measures to deal with inflation.
The world economy's growth engine is slowing, but not collapsing.
The Indian rupee slumped to a record low near 69 to the dollar on Wednesday on growing worries that foreign investors will continue to sell out of a country facing stiff economic challenges and volatile global markets.
Govt rules out controls on FII capital as Sensex tanks 3.97%, rupee breaches 62 intra-day & gold surges the most in two years
Faced with sluggish economic growth and dwindling exports, China on Wednesday devalued its currency for the second consecutive day.
'India easily remains one among the more attractive large economies, with high growth and stable/improving macros, as a top investment destination.' 'We are looking pretty good.'
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