There is a lot of tornado in the currency market before the policy of the Monetary Policy Committee of Reserve Bank of India. The rupee appeared at the lower level on Tuesday in the dollar. By the way, a little recovery was seen in the rupee, but till the market was closed, the rupee saw a decline of 16 paise. According to experts, the rupee has seen a decline on Tuesday with the threat of increasing the tariff of Trump. Due to which the rupee appeared crossing the level of 88 during the business session. Now the biggest question is whether the rupee has surrendered in front of the dollar?
According to experts, this question has also become important because there is a steady decline in the stock market. The dollar index has strengthened and foreign investors are steadily increasing from the stock market. In such a situation, the crisis on the rupee is constantly deepening. According to experts, the process of decline in the rupee is not going to stop yet. In the coming days, the rupee can cross the 90 level in the coming days. Let us also tell you what kind of tornadion has been seen in the currency market.
Rupee is a big fall against dollar
On Tuesday, the rupee fell 16 paise to close at 87.82 (provisional) against the US dollar. The risk-free perception deepened after US President Donald Trump threatened to increase tariffs on Indian goods over the continuous purchase of Russian oil. Foreign currency traders said that the uncertainty of the Indo-US trade agreement is affecting the perception of the domestic market, which is likely to decline further in the rupee.
In addition, weak stock markets further weakened the notion of investors. However, due to the possible intervention of the Reserve Bank of India (RBI), the rupee reduced the initial loss. He said that the overnight decline in weak US dollar and crude oil prices also reduced the decline to some extent.
The domestic currency in the Interbank Foreign Currency Exchange Market opened at 87.95 against the dollar, and in day trading it touched a level of 87.75 against the American currency. At the same time, according to Investing.com, the rupee appeared crossing the level of 88. However, at the end of Tuesday’s trading session, the domestic unit was at 87.82 (provisional), which was 16 paise less than the previous closed price. On Monday, the rupee fell 48 paise to close at 87.66 against the US dollar. By the way, in the last one month, the rupee has got a decline of more than 2.50 percent against the dollar.
Tariff was threatened with increase
Giving a new business threat against India, President Donald Trump said on Monday that he would “significantly” in the US tariff on New Delhi. He accused India of buying a huge amount of Russian oil and selling it for huge profits. Last week, the Trump administration imposed a 25 percent fee on all Indian goods. The US President also announced a fine on purchasing “most” Russian military equipment and crude oil.
The rupee may continue to fall
Research analyst of Mirae Asset Sharekhan’s Commodity Research Anuj Chaudhary said that we hope that the rupee will continue to fall due to the uncertainty of the Indo-US trade agreement affecting the domestic market perception. Weakness in domestic stock markets and withdrawal of foreign institutional investors (FIIs) can put further pressure on the rupee.
Chaudhary further said that the rupee can also be weak before the RBI’s monetary policy. The market is expected to cut interest rates by the central bank. However, in September, the total weakness in the US dollar can support the lower levels in the US dollar amid the increasing possibilities of cutting interest rates by Fed in September. Meanwhile, investors remain cautious before RBI’s monetary policy decision this week.
The Dar-Development Committee headed by RBI Governor Sanjay Malhotra on Monday launched a three-day discussion to decide on the next bivalent monetary policy. The six -member Monetary Policy Committee (MPC) will declare the next bilateral policy rate on Wednesday.
Dollar index boom and market declines
Meanwhile, after OPEC+ agreed to another major increase in production in September, Brent crude prices fell by 0.97 per cent to $ 68.09 per barrel in futures trading. After the fuel demand in the US figures, the concerns of the additional supply have increased. The dollar index, which shows the strength of the dollar against a group of six currencies, rose 0.18 percent to 98.68.
In the domestic stock market, the 30 -share BSE Sensex rose 308.47 points or 0.38 percent to close at 80,710.25, while the Nifty rose 73.20 points or 0.30 percent to close at 24,649.55. According to exchange data, foreign institutional investors (FIIs) sold shares worth Rs 2,566.51 crore on a pure basis on Monday.