Indian Currency: On the last trading day of last week i.e. Friday, a huge fall of 98 paise was recorded in the Indian rupee, which was the biggest single day fall in the last three years. After this, the rupee reached its all-time low of 89.66 against the US dollar. However, after this the rupee recovered rapidly.
The fall in crude oil prices amid continuous selling by foreign investors and direct intervention by the RBI played an important role in saving the rupee from further weakening. On Monday, the first trading day of the week, the rupee strengthened by 50 paise and closed at 89.16. On Tuesday also the rupee rose by 11 paise to reach the level of 89.05.
strong movement of rupee
According to market experts, there is pressure on the rupee due to the strength of the dollar. HDFC Securities Research Analyst Dilip Parmar says that due to possible intervention from the central bank and rebalancing in MSCI index, the rupee gained the most in Asian currencies. However, withdrawal of foreign funds, increasing trade deficit and strengthening of the dollar index have weakened the sentiment of the rupee.
Last Friday, there was huge demand for dollars due to selling in foreign markets and trade uncertainties, due to which there was a sharp fall in the rupee. Earlier, the biggest fall in one day was 99 paise on 24 February 2022.
How will the rupee perform going forward?
According to Dr. Aastha Ahuja, Associate Professor, Department of Economics, Aryabhatta College, Delhi University, the confidence of foreign investors is currently weak in the Indian market, and unless a trade deal is made, uncertainty may persist. The increasing trade deficit is also putting pressure on the rupee.
He says that the weakness of the rupee is not only affecting the market but also the consumers and the students studying abroad, because the cost of sending money to them has increased. However, in case of a trade deal, the chances of the rupee falling to the level of 86–87 will increase.
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