RBI’s likely intervention in forex market helps rupee to avoid a new low | Economy & Policy News



Market participants stated that the Reserve Bank of India’s (RBI’s) likely intervention in the foreign exchange (forex) market on Wednesday prevented the rupee from reaching a record low. The Indian unit depreciated by 7 paise against the US greenback, settling at Rs 83.33 per dollar after touching an intraday low of Rs 83.45 per dollar.


The rupee had hit a record low of Rs 83.48 (intraday) against the dollar on November 10, 2023.


“The rupee has seen an abrupt depreciation in the past two/three trading sessions due to Chinese yuan depreciation adding pressure on emerging economies’ currencies,” said Harsimran Sahni, executive vice-president and head of treasury at Anand Rathi Global Finance.


“Forex reserves are at an all-time high as the RBI has been adding forex in the past few months, leading some market participants to cut their short positions, thereby unwinding the dollar/rupee short trade. Foreign portfolio investors with unhedged rupee exposure have been selling government bonds after the rupee weakened, adding pressure on the rupee,” said Sahni.


According to RBI data, India’s forex reserves stood at $642.49 billion as of March 15, 2024.


The rupee had settled at a record closing low of Rs 83.43 against the dollar on Friday. Market participants speculated that the RBI did not intervene in the forex market towards the end of the trading hours on Friday, leading to a sharp depreciation in the local currency.

“The rupee volatility will continue with weakness visible in the rupee. RBI intervention shall keep the rupee somewhat supported on a fall towards 83.5. The range of 83.2-83.55 can be seen in the rupee,” said Jateen Trivedi, vice-president, research analyst, LKP Securities.


Market participants expect the volatility in the rupee to continue on Thursday, given it is the last trading day of the current financial year (2023-24).


“Thursday being the last day of the financial year, we may see some selling in $/rupee but expect dollar bids at all lower levels. Asian currencies are well-bid, and the market will be closed for two days on Friday and Monday. The RBI will be present to protect the rupee from falling below the 83.4 level, but it will be a wait-and-watch story. At the time of writing Wednesday’s closing views, NDF was quoting at 83.35, probably well protected by RBI,” said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.


The rupee, having depreciated 0.6 per cent against the dollar in March so far, is likely to rebound in April, largely due to foreign inflows ahead of India’s government bond inclusion in JP Morgan’s Government Bond Index-Emerging Markets, set to begin at the end of June 2024.

ALSO READ: RBI urges state refiners to make payments for some oil imports in Rupees

First Published: Mar 27 2024 | 9:04 PM IST



Source link

Visited 1 times, 1 visit(s) today

Related Article

View from Westminster

How Labour’s welfare bill will cut benefits

Sign up for the View from Westminster email for expert analysis straight to your inbox Get our free View from Westminster email Get our free View from Westminster email The government’s own analysis has shown that 150,000 people will still be pushed into poverty even after ministers announced two major changes to the controversial welfare

MILAN, ITALY - FEBRUARY 04: Massimiliano Allegri, Head Coach of Juventus, gestures prior to kick-off ahead of the Serie A TIM match between FC Internazionale and Juventus - Serie A TIM at Stadio Giuseppe Meazza on February 04, 2024 in Milan, Italy. (Photo by Marco Luzzani/Getty Images)

Thiago Silva ‘called Allegri’ for tips on how to beat Inter

Fluminense captain Thiago Silva, a former Milan star, reveals he called Massimiliano Allegri before the Inter game to have ‘some information’ about the Nerazzurri. Thiago Silva’s Fluminense beat Inter 2-0 in the Club World Cup Round of 16 on Monday. Advertisement During a post-match interview with SportMediaset, Thiago Silva revealed that he had spoken to

Nvidia CEO: Huawei ‘has got China covered’ if the U.S. doesn’t participate

Huawei open-sources more AI models, grows into Chinese AI juggernaut

In recent years, the company has transformed from a competent private sector telecommunications firm into a “muscular technology juggernaut straddling the entire AI hardware and software stack,” said Paul Triolo, partner and senior vice president for China at advisory firm DGA-Albright Stonebridge Group. Ramon Costa | SOPA Images | Lightrocket | Getty Images Huawei has

2 men arrested over HK$30,000 construction site theft in Hong Kong

2 men arrested over HK$30,000 construction site theft in Hong Kong

Two men issued with two-way exit permits have been arrested for allegedly stealing 32 bags of copper wire and tools worth HK$30,000 (US$3,820) from a construction site in Hong Kong’s Kwun Tong. Police said on Tuesday that a security guard at a construction site located at 11-15 On Yu Road in Sau Mau Ping discovered

Bristow Group Updates Global Sustainability Initiatives, Commits to Responible Growth

Bristow Group Inc. (NYSE:VTOL) is one of the 12 Small Cap Stocks with High Upside Potential. On May 20, Bristow Group Inc. (NYSE:VTOL) released its latest global sustainability report, reaffirming its commitment to responsible growth. The company strengthened its fleet with modernization efforts through an agreement to acquire 10 Leonardo AW189 super-medium helicopters, with an

0
Would love your thoughts, please comment.x
()
x