The greenback's strength against other Asian currencies and lacklustre local equity markets made the rupee depreciate.
Foreign investors have pulled out Rs 44,396 crore from Indian equities this month, driven by strength of the dollar, rising bond yields in the US, and expectations of a weak earnings season. This came following an investment of Rs 15,446 crore in the month of December, data with the depositories showed.
The rupee on Friday resumed lower at 60.25 a dollar from previous close of 60.19 at the Interbank Foreign Exchange market.
Can we find fault with RBI for not intervening enough in the market? Actually no, say some experts. A correction in rupee was long overdue.
In a forthright "last public lecture" before he retires next week, RBI Governor D Subbarao was on Thursday sharply critical of the government, blaming its "loose fiscal stance" for the current economic woes, and warned that the root cause of rupee depreciation is "domestic structural factors."
Liability goes up by Rs 1,000 cr for every Rs 1 change in $ exchange rate
Escalating trade tensions amid a tariff war after Donald Trump took over as President of the United States (US) could adversely impact global growth and fuel inflation, an article on the "State of the Economy" in the Reserve Bank of India (RBI) monthly bulletin said.
Fitch Ratings on Monday said India's steady GDP growth outlook, improved banking sector's financial health and expected interest-rate cuts in 2025 will support credit access for corporates in FY26.
The dollar index was up by a whopping 0.45 per cent against basket of six major global rivals, which also pushed the rupee to log its biggest daily loss since September 15.
The country's largest car maker Maruti Suzuki India (MSI) on Thursday said it is considering increasing prices of its products from next week to offset the impact of rupee depreciation.
Indian drugmakers supply 47 per cent of the generic medicine requirements in the US, and tariffs would have increased prices in the US domestic market for patients, who are already dealing with drug shortages.
The company had earlier stated that for a fall of every rupee against dollar, it loses about Rs 90 crore (Rs 900 million) on a yearly basis.
Crude oil hit an all time high in rupee terms; Tuesday figures expected to be higher
Auto maker Ford India on Thursday said it has hiked prices by 1-5 per cent on different models with immediate effect to offset rising input costs.
Forex dealers said besides the dollar gaining against other currencies in the global markets on the back of a strong US economy, increased demand for the American unit from importers weighed on the rupee but a higher opening in the domestic equity markets, capped the fall.
There are two major factors behind the rupee fall - one is international and the other is domestic.
Foreign investors pulled out Rs 4,285 crore from Indian equities in the first three trading days of the month driven by apprehensions ahead of the third-quarter earnings season and high valuations of domestic stocks. This came following an investment of Rs 15,446 crore in the entire December, data with the depositories showed.
It can be noted that the rupee lost nearly 7 per cent since the beginning of May as FIIs have pulled out nearly $4 billion from the domestic debt, as bond yields fell on expectation of RBI cutting rates on Monday.
According to analysts, IT firms like Infosys, TCS and HCL Technologies are likely to benefit the most on account of larger US exposures and dollar billing.
Tracking a steep fall in local share market, the Indian rupee on Tuesday washed out initial gains and ended with a loss of 16 paise
The middle income group has been impacted by inflation particularly in context of falling The rupee and its cascading effects on price rise of items like petroleum products and edible oil, according to a survey by apex chamber Assocham.
The rupee extended its fall for the fourth consecutive day by losing another 6 paise to hit a fresh one-month low of 62.31.
Despite the narrowing spread of yields between the benchmark 10-year Indian government bond and the 10-year US Treasury bond, foreign portfolio investors (FPIs) are continuing to invest in the domestic debt market this year -- a trend backed by a stable currency and a less volatile bond market. FPIs have been net buyers in the debt market in 2023 so far, marking the first time since 2019. The yield spread between the 10-year Indian government bond and the 10-year US Treasury note stood at 3.14 per cent on August 8 - the narrowest in over a decade.
The rupee on Friday slipped 1 paisa to close at its all-time low of 78.33 (provisional) against the US dollar. At the interbank foreign exchange market, the local currency opened at 78.20 and finally settled at its all-time low of 78.33, down 1 paisa from its previous close. During the day, the local unit witnessed an intra-day high of 78.19 and a low of 78.35 against the American currency.
Forex dealers said besides dollar's gains against other currencies, fresh demand for the American unit from importers and a weak opening in the domestic equity market put pressure on the rupee.
Ambani and Adani account for a fifth of the net worth of all billionaire promoters in the country and half the combined net worth of the top 10.
Jet Airways (India) Ltd hopes to minimise the impact of a sharp rupee depreciation by growing its international network over the next few months.
Luxury carmaker Mercedes-Benz India on Thursday said it will increase prices of its vehicles ranging between Rs 2 lakh to Rs 12 lakh across different models from April 1, to offset rising input costs specially the adverse impact of foreign exchange. This will be the second time in three months that the company is increasing prices of its vehicles. The ex-showroom price of the company's model range will increase by up to 5 per cent from April 1, 2023, the company said.
The price increase is marginal and the company is confident that the customers will appreciate its efforts to offer globally renowned products at affordable prices.
The share of non-resident Indians (NRIs) and overseas investors in Indian mutual funds has been declining over time, despite adding half-a-trillion rupees to holdings over the last five years. Mutual fund holdings for the segment went up from Rs 0.95 trillion as of December 2018 to Rs 1.54 trillion as of December 2022, shows Business Standard analysis of data from the industry body Association of Mutual Funds in India (Amfi). Their share in overall mutual fund assets has fallen from 4.2 per cent to 3.9 per cent during the same period.
The rupee closes 12 paise down against the dollar.
The rupee has declined by 24 paise in four days of losses.
'My advice: Don't mark your portfolio to market every day. Focus on survival.'
The expectations of a borrowing cut by the government faded among bond-market participants after the general election results because they feel the compulsions of running a coalition may put pressure on the exchequer, according to dealers. The recent trend of moderate depreciation in the rupee's nominal effective exchange rate (NEER) might not persist if there are significant changes to the structural reform agenda.
The rupee came under pressure on demand from importers as the dollar strengthened overseas.
Rupee retreats from 3-week high against dollar ahead of Budget.
The minister further said the rupee will regain the ground it lost against other currencies in the past few days.
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The rupee is set to breach the Rs 60-a-dollar mark again this week as the Street expects foreign institutional investors to continue pulling out of domestic markets. According to the street, this would result in government bond yields rising.
Hyundai Motor India Ltd (HMIL) on Thursday said it will hike prices by up to Rs 20,000 across models, except the newly launched compact car Grand i10, from October 1 to offset the impact of rupee depreciation and rising input costs.
