[ad_1]
Tuesday was the eighth day in 2022 when the Indian monetary unit fell by more than half a percent against the dollar. It closed down 0.53% at $79.37 and hit another lifetime low of 79.38.
The recent unilateral depreciation of the rupee has reflected a lopsided trend in foreign commitment to Indian financial assets. Rupee Mumbai continues to plunder new depths as foreign funds begin to flow out of the city amid explicit interest rate policy changes by central banks on both sides of the Atlantic.
“The fear of recession is haunting investors across the globe, which in turn is driving international investors back to dollar-backed assets,” said currency analyst Anindya Banerjee. Kotak Securities, “The pressure on the rupee is likely to increase as the central bank is not too rigid to protect any particular level. Foreign funds are expected to extend their selling streak.”
The rupee has depreciated nearly 6% so far in 2022, with the currency depreciating more than a percentage point in two trading days (please refer to the table). One of those days of the exaggerated currency movement coincided with Moscow’s invasion of its neighbor.
The fall comes amid continued selling by foreign funds, which have sold over Rs 2 lakh crore of local assets since October.
reserve Bank of India ,reserve Bank of IndiaIt is said to have intervened in the market on Tuesday, but only to a limited extent. The central bank sold an estimated $500-700 million when the rupee was hovering around 79.10 in the first trade, dealers said.
“We did not see strong RBI intervention when the local unit was slipping from the previous record lows,” said a chief dealer of a large bank.
In Europe, economic uncertainties are huge, causing the dollar to rise in value against other major currencies.
The euro fell to a 20-year low against the dollar as bearish concerns saw investors seeking the safety of dollar-backed assets.
In Europe the euro fell nearly 1.3% during the session to reach $1.029. Germany recorded its first monthly trade deficit since 1991 as inflation soared.
[ad_2]
Source link
