Indian Rupee depreciation is due to the US currency demand from Importers
The rupee trades flat by 4 paise at 67.05 against the dollar in early trade today at forex market. This is due to the fag-end dollar selling by banks and exporters and the American unit strengthening green back overseas amidst a lower opening of the domestic equity market.
Forex dealers attributed that the fresh demand for the American currency from importers and banks, have given to the downfall of the rupee and moreover greenback’s gains against other currencies overseas also has put immense pressure on the rupee.
Though The Indian rupee opened weaker but it eventually it recouped all the losses and was trading little changed against the US dollar. Forex Traders are aiming on the results of the impending state elections on 11 March.
The progressive openings in the domestic equity markets and dollar’s weakness against some currencies overseas capped the losses.
Yesterday, the rupee was on high gains for the second day by moving to another 3 paise to close at 66.90 per dollar on continuous selling of the American currency by banks and exporters.
Most Asian currencies were dealing lower. Philippines peso was down 0.33%, Japanese yen fell 0.26%, Indonesian rupiah 0.17%, Malaysian ringgit 0.11% and Taiwan dollar fell 0.08%. Though, China offshore rose 0.1%.
The dollar index, which weighs the US currency’s strength against major currencies, was trading at 100.95, up 0.01% from its earlier close of 100.94
Simultaneously, the benchmark BSE Sensex fell by 40.24 points, or 0.14 per cent, to 28,428.51 in early trade.
Since the beginning of this year, the rupee has gained 1.35%, while foreign institutional investors have bought $373.20 million and $567 million from local equity and debt markets, respectively.
On Wednesday, the US Federal Reserve will announce the digests from its 31 January -1 February Federal Open Market Committee (FOMC) meeting, which may comprise hints to the members’ views on the economic impact of President Donald Trump’s policies.