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Rupee Slips to 96.88 as Global Risks Weigh
The Indian rupee lost some value against the US dollar on Thursday.
It ended the day at 96.88 rupees for one dollar, down from 96.75 the day before.
Investors were worried about geopolitical tensions and other risks around the world.
The dollar was stronger, and oil prices were high, which added pressure on the rupee.
Concerns about shipping disruptions near the Strait of Hormuz helped push oil prices higher.
The report said the Reserve Bank of India may have supported the rupee, but it did not confirm that the bank intervened.
The RBI governor said the bank would support an orderly movement in the rupee and limit excessive volatility.
Indian share markets also fell, and foreign investors sold shares.
The rupee fell 13 paise to close at 96.88 per US dollar on Thursday, compared with Wednesday’s close of 96.75.
The currency faced pressure from global risk aversion, a stronger dollar, elevated crude prices and escalating geopolitical tensions.
Brent crude rose 4.20% to USD 104.41 per barrel amid concerns about supply disruptions through the Strait of Hormuz.
The report said suspected Reserve Bank of India intervention may have supported the rupee at lower levels, but did not confirm an intervention.
India’s Sensex fell 1,045.46 points, while foreign institutional investors sold equities worth Rs 12,943.58 crore net.
- Who
- The Indian rupee, foreign exchange traders and the Reserve Bank of India.
- What
- The rupee depreciated 13 paise and closed at 96.88 against the US dollar.
- Where
- The interbank foreign exchange market in Mumbai, India.
- When
- Thursday, October 8, as stated in the report.
- Why
- Risk aversion amid geopolitical tensions, a stronger dollar and elevated crude oil prices pressured the rupee.
Factors Pressuring the Rupee
Factors Offering Support
Market direction
Factors Pressuring the Rupee
Risk aversion linked to escalating geopolitical tensions, global dollar strength and high crude prices weighed on the rupee.
Factors Offering Support
The report said suspected RBI intervention may have supported the rupee at lower levels; the intervention was not confirmed.
Outlook and policy
Factors Pressuring the Rupee
Analysts cited a strong dollar and rising oil prices as risks that could continue to pressure the currency.
Factors Offering Support
An analyst said lower odds of a US Federal Reserve rate hike in October and possible RBI intervention could support the rupee. The RBI governor also said the central bank would support orderly movement and guard against excessive volatility.
Key facts
- Closing exchange rate
- 96.88 rupees per US dollar
- Daily change
- Down 13 paise
- Previous close
- 96.75 rupees per US dollar on Wednesday
- Dollar index
- 102.40, up 0.16%
- Brent crude
- USD 104.41 per barrel, up 4.20%
- Sensex close
- 71,593.24, down 1,045.46 points
- Net FII equity sales
- Rs 12,943.58 crore on Thursday
Quotes
Sanjay Malhotra
Governor of the Reserve Bank of India.
“We expect the rupee to trade with a negative bias on risk aversion in global markets amid escalation of geopolitical tensions. A strong dollar and surge in crude oil prices may also pressurise the rupee. However, declining odds of a rate hike by the US Fed in October and any intervention by the RBI may support the rupee at lower levels. Traders may also take cues from weekly unemployment claims data out of the US.”
theprint.in
“We will ensure that the rupee stabilises, that the rupee finds its correct value, and we will support an orderly movement of the rupee in finding its correct value and at the same time in ensuring that there is no excessive volatility.”
theprint.in
Sources
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