The BRICS TimesExperts suggest the Rupee’s growth faced hurdles due to a powerful Dollar and consistent selling by foreign investors (FII)
The Indian Rupee has sparked fresh concerns following a recent sharp decline. Despite ongoing trade talks with the US and hopes for an EU free trade deal, the currency hit an all-time low on Thursday. However, it staged a quick recovery the same day, ending 9 paise stronger. On Friday morning, the Rupee rose further by 9 paise to 91.90 against the US Dollar, aided by lower global crude oil prices.
Market Dynamics and Gains
Forex traders noted that the Rupee’s rise remained capped by the Dollar’s strength and FII outflows. In the interbank market, the currency opened at 91.89 and touched 91.87 before stabilizing at 91.90. This reflects a 9-paise gain from the previous close. On Thursday, the Rupee had hit its lowest point ever, closing at 91.99 against the US Dollar.
Expert Insights on Currency Trends
Akshat Garg, Research and Product Chief at Choice Wealth, shared his views on the situation. He stated, “The continuous strength of the Dollar, rising US bond yields, and foreign investor exits have kept pressure on emerging market currencies, including the Rupee.”
He also mentioned that month-end Dollar demand from importers has added further pressure. Garg believes the RBI has enough resources to control volatility. However, they might not defend specific levels aggressively unless market conditions become chaotic.
Stock Market and Global Cues
Earlier on January 23, the Rupee had also slumped to the 92 level against the Dollar. Meanwhile, the Dollar Index, measuring its strength against six major currencies, stood at 96.48 with a 0.36% gain. In the oil market, Brent crude futures dropped by 1.50% to trade at 69.62 Dollars per barrel.
