The Indian rupee hit the lowest record against Dollar for the second time now and even posted its poorest fall in the last 9 months. All this is mainly due to Dollar demand from the oil companies as well as gold importers. The traders reported that the Reserve Bank of India has stepped into for propping up the Rupee and so prevent the sharper fall.
The past sessions have actually resembled the developments in the month of May when Rupee tumbled to the set of record lows as the renewed universal risk aversion exposes the economic challenges of the country and its huge current and fiscal account deficits.
The experts further say that the Indian rupee may continue falling further in near future, dragged down by drive from poor universal risk scenario. Rajeev Mahrotri from IndusInd Bank stated that 58.50 might not be seen in next week however the present rally has the drive or momentum to actually take it to that stop.
As for the week, Rupee reduced a bit over about 3 percent in order to post the worst decline in the last 9 months. On Thursday, rupee hit the last low record at 56.55 as the risk aversion has raised this week after the poor economic date and when the Federal Reserve actually disappointed the investors with size of the US bond purchases.
On the other hand, Dollar increased to the highest point in just a week against the set of main currencies on Friday. Further, the confidence in the risky assets of the investors was knocked by Moody’s downgrade of major banks of the world.
Even the rupee fell because the oil firms stepped in to purchase the dollars. Rupee showed some reaction despite the news that the RBI has discussed with some state run oil companies steering around 50% of dollar purchases through a single bank, although no conclusion has been come upon at.
The oil firms recently buy dollars via the competitive bidding through the banks. Moreover, the perceptions are such that the companies are looking forward to purchase the dollars in order to result in hurting of and volatility of the rupee.
In currency futures market, most traded dollar-rupee deals on National Stock Exchange, United Stock Exchange and MCX-SX all ended at around 57.27 on the big amount of $6.4 billion.
Let’s see what is there in store for rupee in the upcoming months.