Indian Rupee Makes Slight Gain, Long-term Revival Dubious, Say Traders

In a slight reversal of its recent downward trend, the Indian rupee experienced a modest appreciation on Friday morning, mirroring positive movements in most other Asian currencies. However, traders anticipate that this upturn might be short-lived. As of 11:19 a.m. IST, the rupee was valued at 83.1625 against the U.S. dollar, recovering from its all-time closing nadir of 83.21 observed in the previous trading session.

Earlier in the week, the Reserve Bank of India undertook steps to stem the rupee’s devaluation, selling U.S. dollars in the spot market and intervening in the non-deliverable forward market, as confirmed by trading insiders.

This fluctuation in the rupee comes against a backdrop of a depreciating dollar index and a decrease in U.S. Treasury yields, factors that have facilitated a rise in most Asian currencies. The dollar index registered a decline, settling at 104.8 during trading hours in Asia, retreating from a half-year peak of 105.15 noted in the New York session. Concurrently, the yield on 10-year U.S. bonds decreased, hitting 4.22%.

In other financial developments, the onshore Chinese yuan reached its lowest point since December 2007, pressured by increased capital outflows. Meanwhile, Brent crude futures experienced a regression, with prices per barrel at $89.35 during Asian trading hours, following a nearly 10-month peak of $91.15 earlier in the week.

Investors and market stakeholders remain vigilant, closely monitoring these economic indicators to gauge the potential for a sustainable recovery in the Indian rupee amidst a complex global financial landscape.

Related Articles

Back to top button