Rupee crosses 90 against dollar for the first time
In the month of May, when the rupee rose from the level of 84 to the level of 83 against the dollar, then everyone felt that the country’s currency would once again strengthen to the level of 80. But since then 7 months have passed. During this period, the rupee has fallen by about 8 percent against the dollar. On Wednesday, it crossed the level of 90 against the dollar for the first time. According to experts, the rupee has declined due to increasing demand for dollars at the local level and profit-booking by foreign investors.
Now the biggest question is whether the rupee will fall further? Experts believe that a further decline may be seen against the dollar in the coming days. There are chances of it going beyond the level of 91. However, the rupee may change its course after seeing the interest rate cut by the Fed and the stance of the RBI MPC. Let us also tell you at what level the rupee is trading against the dollar.
Rupee crosses 90 for the first time
On Wednesday, the rupee crossed the 90 level against the dollar for the first time and fell by 6 paise to 90.02 in early trade. This happened due to banks continuing to buy US dollars at high levels and foreign institutional investors (FIIs) continuing their withdrawal. However, according to foreign currency traders, the weak dollar index and decline in global crude oil prices mitigated this huge fall.
At the interbank foreign currency exchange market, the rupee opened at 89.96 against the dollar and slipped to a record low of 90.15, but then recovered slightly to trade at 90.02, 6 paise lower than its previous close. On Tuesday, the rupee fell 43 paise to close at a lifetime low of 89.96 against the US dollar, mainly due to continued short-covering by speculators and continued demand from importers for the American currency.
Why did the rupee fall?
Anil Kumar Bhansali, treasury head and executive director, Finrex Treasury Advisors LLP, said that the Indian government and the Reserve Bank of India (RBI) want to help importers, due to which the rupee is weakening and the dollar bid has remained good in the last few days.
He said that nationalized banks were continuously buying dollars yesterday i.e. on Tuesday… After the market closed on the trading platform, a deal was struck at 90.0050. This fall in the rupee has come despite the weakening of the dollar index due to the blockage in India-US trade talks and huge withdrawal of foreign portfolio investors (FPIs).
Bhansali said that if RBI support is reduced at 90, then the rupee can reach the level of 91 in this cycle. The MPC meeting is starting on Wednesday and the decision on the interest rate will be announced on December 5. Whereas the Fed will announce its policy rate on December 10. He said that cut in interest rates by RBI may lead to further selling of rupee.
Dollar and crude oil and market decline
- Meanwhile, the dollar index, which measures the dollar’s strength against six currencies, was trading 0.13 percent lower at 99.22.
- On the other hand, there has also been a decline in Brent crude oil of Gulf countries in the international market. According to the data, Brent crude was trading at $ 62.43 per barrel, down 0.03 percent.
- On the domestic stock market front, Sensex fell 165.35 points to 84,972.92 in early trade, while Nifty fell 77.85 points to 25,954.35.
- According to exchange data, foreign institutional investors sold shares worth Rs 3,642.30 crore on Tuesday. However, in the month of December, foreign investors have withdrawn Rs 4,335 crore from the stock market.
8 percent decline in 7 months
However, there has been a decline of about 8 percent in the value of rupee against the dollar. If we look at the data, the rupee was at the year’s high at the level of 83.76 on May 2. Which reached a life time low on December 3 with a level of 90.15. This means that the rupee has fallen by Rs 6.39 against the dollar. This means that the rupee has fallen by about 8 percent against the dollar.