A weak rupee, though seemingly good for exporters, would push up input cost further for Indian companies.
The rupee depreciated further by 7 paise to 65.12.
The depreciation in the yuan has led to a decline in all emerging market currencies
Lok Sabha Speaker Om Birla on Monday warned members against referring to anyone's caste and religion in the House after a Congress MP alleged that Finance Minister Nirmala Sitharaman made certain remarks about his proficiency in Hindi because he belonged to a lower caste.
The rupee fell by 49 paise to close at 81.89 (provisional) against the US dollar on Monday as heavy selling pressure in the domestic equities and a spike in crude oil prices weighed on the local unit.
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The rupee gained 8 paise to close at over two-week high of 61.23 against the US dollar in the previous session.
Double whammy for consumer firms, where the top line will remain subdued due to demonetisation and margins will squeeze owing to a crude oil spike and rupee depreciation, reports Viveat Susan Pinto/Business Standard from Mumbai.
The stronger than expected monsoon has not yet softened food inflation as much as it should have and in particular, vegetable prices have been impacted by weather-driven supply disruptions, said RBI Governor D Subbarao while unveiling the first quarter monetary policy review.
The report further pointed out that the current rupee volatility will be 'less damaging than in 1991, when low reserves and a widening current account deficit prompted India's last balance of payment crisis'.
Rupee depreciation and a slowdown in capital inflows make it harder for business to service liability, while keeping pressure on the currency.
Apart from the emotional value attached to buying gold, the yellow metal offers protection against inflation, interest rate spikes, currency and geopolitical risks, says Anamika Pareek.
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The BofAML report said that five year money can be raised by issuing the 7 to 9 per cent coupon bonds to stabilise markets, just as it was done in 1998 and 2001.
India's foreign exchange reserves declined in the week that ended on April 12, after having risen for the seventh straight week to hit an all-time high of $648.56 billion. As per the latest data released by the Reserve Bank of India (RBI), the country's foreign exchange kitty declined by $5.40 billion to $643.16 billion in the April 12 week. India's foreign currency assets (FCA), the biggest component of the forex reserves, declined by $6.51 billion to $564.65 billion, the central bank's weekly statistical data showed.
The Indian rupee on Monday reacted downwards by 12 paise to log nearly one-week closing low of 63.41 against the Greenback.
The local currency recovered some ground after the Reserve Bank of India (RBI) was said to have stepped in through state-run banks, helping the rupee to end at 64.30, a fall of 110 paise or 1.74 per cent.
There was a massive 24% decline in India's gems and jewelry exports to $2,321 million for September 2018 as against $3,053.38 million in the same period last year.
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It also painted a grim possibility of any major gains in the rupee during the current fiscal saying that the continuing global volatility, and domestic political uncertainty ahead of the 2014 hustings will limit chances of any significant appreciation apart from further impact growth.
The rupee has depreciated 10.5 per cent against the dollar this year, making it Asia's worst-performing currency.
India's rupee is likely to remain under pressure due to high prices of crude oil and other commodities, and may stabilise at around 79-80 against the US dollar in the near term, say experts amid limited headroom available with the Reserve Bank to check the weakening of the domestic currency. The currency has slumped over 5 per cent this year after Russia's invasion of Ukraine sent international crude oil prices soaring to a decade high. On Monday, rupee ended at a fresh all-time low of 78.34 (provisional) against the US dollar.
Extending its losing streak for the fourth straight day, the rupee weakened by five paise to 61.01 against the US dollar in early trade today at the Interbank Foreign Exchange market on high demand for the American currency from importers.
In the currency markets, the rupee lost another 10 paise to close at 1-week low of 63.54 against the US dollar
As the Indian currency hovers around its lowest versus the US greenback, several smaller and mid-sized companies are expected to face rough weather as almost 44 per cent of the foreign loans taken by Indian companies remained unhedged. According to the data sourced from the Reserve Bank of India, Indian companies raised around $38.2 billion in the financial year ended in March. Of this, only 56 per cent of the loans are hedged while the rest of the foreign loans remain unhedged, thus risking the companies to forex volatility.
If the REER is to be restored to its 2004-05 level, the rupee has to depreciate a lot, says V K
Indian rupee is likely to test 76-76.50 levels as a relatively strong greenback, boiling crude prices and COVID headwinds deepen the depreciation bias for the domestic currency, according to experts. One of the significantly-hit Asian currency in recent months amid uncertain economic times, rupee is expected to see a consolidation in the vicinity of the current level before being pulled towards the depreciation bias. While the equity market has been surging with occasional blips, the rupee has mostly been weak against the US dollar in recent months.
The sharp pullback in mid and smallcap stocks signals a cooling-off period in segments that previously attracted considerable investor interest.
Falling for the second day, the rupee on Friday weakened by 12 paise against dollar to end at 62.68 weighed down by demand for the American currency from importers and data showing fiscal deficit crossed 95 per cent of the annual target during April-December.
Indian rupee appreciated by 35 paise to end at two-week high of 63.03 against the greenback.
Following are the highlights of the Economic Survey 2022-23 tabled in Parliament on Tuesday
Rupee down 13 paise to 66.72 against dollar
Some leading Indian companies are likely to see their earnings declining if the Indian currency depreciates further, analysts and finance heads say.
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.
With India's imports exceeding exports, weak rupee does more harm than good. Analysts, however, say that rupee depriciation is positive for export-oriented sectors such as IT services, pharmaceuticals, textiles and automobiles
Given the prevailing uncertainties, investors must maintain a 10-15 per cent allocation to gold in 2023.
Investors in international funds should have a horizon of more than five years. Not only will this help them overcome equity and currency volatility, it will also help them enjoy better tax treatment, says Sanjay Kumar Singh.
India's exports may have touched an all-time high of $422 billion in 2021-22 but recession in key western markets and geo-political crisis due to the Russia-Ukraine war are expected to impact the growth of the country's outbound shipments in 2023. All the global trade promoting factors like political stability, movement of goods, adequate availability of containers and shipping lines, demand, stable currency and smooth banking systems are in disarray. Adding to the woes, COVID cases have again started rising in countries like China, Japan, South Korea and the US.
Even the persistent rise in equity market failed to restrict the rupee's fall.
Piped cooking gas rates are also increased by Re 1 with effect from midnight.
After a robust 2023, foreign investors significantly scaled back their investments in Indian equities in 2024, with net inflows amounting to over Rs 5,000 crore, as elevated domestic valuations, coupled with geopolitical uncertainties prompted investors to adopt a more cautious stance. Looking ahead to 2025, FPI flows into Indian equities could see a recovery, supported by a cyclical upswing in corporate earnings, particularly in domestic-oriented sectors like capital goods, manufacturing, and infrastructure, Vinit Bolinjkar, head of research, Ventura Securities, said.
The chances of a rate cut in September have risen.
The first major devaluation of the rupee happened in 1966 when it was pegged against the US dollar at Rs 4.75/$
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