Rupee Sheds 38 Paise, Steepest Fall in 1 Month
The Indian rupee came under pressure and closed weaker by 38 paise at 84.82 on Wednesday
The local unit initially opened at 84.63 and appreciated in early deals towards 84.47. However, importers, fearing tensions to continue, hedged their imports. The local unit hit an intra-day low, falling nearly 50 paise at 84.94 level in afternoon deals. However, it recovered some losses by the end of the trade after state-owned banks on behalf of Reserve Bank of India (RBI) sold dollars. According to traders, the RBI’s presence ensured that the rupee stays in the zone of 84.45 to 84.95 during the day.
Asian currencies were lower on the day, with the offshore Chinese yuan declining to 7.22 and the Indonesian rupiah down 0.5 per cent.
Investors await the Federal Reserve's policy decision due later in the day. No changes to benchmark interest rates are expected but markets will be looking forward to the Post Meeting Press Conference from Fed Chair Powell.
Anil Bhansali, head of treasury at Finrex Treasury Advisors, “The range for tomorrow is expected between 85.30 to 86.30 as India shuts airports and is battle combat ready for any retaliation. Conflicting reports of Pakistan not retaliating were buzz in the market. It is a wait and watch situation for everybody. Exporters should start hedging their exports to some extent while imports should now buy near to 84.50 unless the situation de-escalates.”
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.23 per cent at 99.46.
The Indian rupee came under pressure and closed weaker by 38 paise at 84.82 on Wednesday as Indian defence forces conducted targeted strikes at terror hide outs within Pakistan and Pakistan occupied Kashmir (PoK) overnight. This was the rupee's steepest decline in one month.
The local unit initially opened at 84.63 and appreciated in early deals towards 84.47. However, importers, fearing tensions to continue, hedged their imports. The local unit hit an intra-day low, falling nearly 50 paise at 84.94 level in afternoon deals. However, it recovered some losses by the end of the trade after state-owned banks on behalf of Reserve Bank of India (RBI) sold dollars. According to traders, the RBI’s presence ensured that the rupee stays in the zone of 84.45 to 84.95 during the day.
Asian currencies were lower on the day, with the offshore Chinese yuan declining to 7.22 and the Indonesian rupiah down 0.5 per cent.
Investors await the Federal Reserve's policy decision due later in the day. No changes to benchmark interest rates are expected but markets will be looking forward to the Post Meeting Press Conference from Fed Chair Powell.
Anil Bhansali, head of treasury at Finrex Treasury Advisors, “The range for tomorrow is expected between 85.30 to 86.30 as India shuts airports and is battle combat ready for any retaliation. Conflicting reports of Pakistan not retaliating were buzz in the market. It is a wait and watch situation for everybody. Exporters should start hedging their exports to some extent while imports should now buy near to 84.50 unless the situation de-escalates.”
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.23 per cent at 99.46.