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Rupee Reverses Day's Losses To Close Above 70 Per Dollar: 10 Points

INR Vs USD: The rupee settled nearly unchanged on Tuesday, after weakening to a fresh all-time low of 70.10 against the US dollar.

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Rupee Reverses Day's Losses To Close Above 70 Per Dollar: 10 Points

INR Vs USD: The rupee recovered three paise from the previous day's close of 69.93.

The rupee settled nearly unchanged on Tuesday, after weakening to a fresh all-time low of 71.10 against the US dollar amid prevailing weakness in emerging market currencies. The rupee closed at 69.90 against the greenback, recovering three paise from the previous day's close of 69.93. Tuesday's session marked the rupee sliding to as much as 70.10 against the American currency. With that, the rupee fell below the 70 level against the US dollar for the first time ever.
Here are 10 things to know about movement of the rupee against the US dollar on Tuesday:
  1. The rupee traded in the range of 69.71-70.10 against the US dollar during the session.
  2. The government attributed the fall in the currency to global factors and that central bank intervention - in terms of selling of dollars - may not provide much support to the currency.
  3. "Even if the rupee falls to 80, it will not be a concern provided all other currencies depreciate," Economic Affairs Secretary Subhash Chandra Garg said. There is "nothing at this stage to worry", he said.
  4. The dollar, in which commodities such as gold are priced, edged lower against a basket of its peers as the Turkish lira regained its footing, easing concerns of a negative ripple effect on global markets. On Monday, the rupee had registered its biggest single-day decline against the US dollar, after a sharp fall in Turkish lira.
  5. State Bank of India (SBI) Chairman Rajnish Kumar said all currencies have weakened against the dollar, but the rupee has not weakened very much in comparison to other currencies.
  6. "I feel that it (rupee) should stabilise between 69 and 70 because if you look at the numbers for investment which is coming into the country - investment in bonds, investment in equities - this level has become attractive for foreign investment," he said.
  7. At 69.90, the rupee has declined more than 9 per cent against the US dollar so far this year.
  8. Analysts expect the rupee to be volatile in near term.
  9. "The rupee is the victim of a contagion effect impacting all emerging markets (EMs) triggered by the Turkish crisis... The swift move past 69 happened due to foreign institutional investor (FII) outflows and the need to hedge existing short dollar positions in the market, driven by global market sentiment rather than actual importer demand," said B Prasanna, group executive and head-global markets group, ICICI Bank.
  10. "As long as oil continues to be at the current levels, we expect rupee to trade between 69.50 and 70.25 levels," said Salil Datar, CEO and executive director, Essel Finance VKC Forex.

(With agency inputs)





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