The rupee rose marginally by 11 paise to 73.84 against the dollar in early trade on Thursday, reported news agency Press Trust of India (PTI). The dollar’s weakness against some currencies overseas supported the rupee’s recovery, traders were quoted as saying in the
PTI report. The easing of concerns on the rift between the government and Reserve Bank of India (RBI) also supported the domestic currency, they said. On Wednesday, the rupee breached 74-mark in the session before closing at 73.95, the lowest level in nearly three weeks.
Here are 10 things to know about rupee’s movement against the dollar:
- The local unit gathered some respite on Thursday after government on Wednesday made it clear that RBI holds “extensive consultations with the government from time to time” but also accepts its autonomy. “The autonomy of the central bank … is an essential and accepted governance requirement,” the Finance Ministry said in a statement.
- According to a poll conducted by news agency Reuters, there will be little relief for the battered rupee over the coming year, depressed by an escalating US-China trade war and rising domestic political risks ahead of a general election.
- The poll of about 40 foreign exchange strategists taken October 26-31 showed the local currency was expected to gain slightly to 72.5 per dollar in 12 months from about 73.95 on Wednesday.
- However, the predicted outlook for the currency will still leave it much weaker than where it started 2018 – around 63.80, Reuters reported.
- The rupee had hit 74 against the dollar on Wednesday after television channels reported RBI Governor Urjit Patel may resign due to a public spat with the government.
- “We hold on to our view that the INR will return to its fundamental value of approximately 68/69 against the US dollar, but the trajectory towards this value will take much longer and be more painful than we initially anticipated,” Hugo Erken, senior economist at Rabobank, was quoted as saying in the Reuters report.
- The recent life-time low for the rupee was 74.485 per dollar that it hit on October 11.
- A widening current account deficit due to higher global crude oil prices and capital outflows, has pushed the rupee down almost 16 per cent this year. It’s one of the worst-performing Asian currencies this year.
- Oil prices fell early on Thursday, extending losses in previous sessions, amid signs of rising supply and growing concerns that demand might weaken on the prospect of a global economic slowdown. The Brent crude January futures contract lost 44 cents, or 0.32 percent, to trade at $74.72 per barrel by 0054 GMT or 6:24 AM IST.
- Meanwhile, the domestic stock markets opened in the green on Thursday but soon erased early gains and turned negative dragged mainly by IT and FMCG stocks.
Source – NDTV
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