The Central Bank RBI of the country has sold dollars worth several thousand crores to support the money falling towards the record low. Bloomberg’s report, quoting people familiar with this transaction, said that RBI has sold at least $ 5 billion value of US currency to handle the rupee in this month. According to the report, no official statement in this case has been revealed by RBI so far; If this trend continues even further, it can become the biggest month of RBI’s pure dollar sales since January.
Last week, the rupee fell to 87.89 per dollar, which was just slightly lower than its all -time low level as US President Donald Trump dusk tariffs on Indian items to 50 per cent on Indian items as a punishment for Russian oil purchases on 6 August. Weak rupee can promote imported inflation and can make already weak economic reform worse. This intervention is a sign of possible change from the RBI’s earlier trend under the leadership of Governor Sanjay Malhotra, who took over in December.
One in Asia’s worst currency
So far this year, the rupee has fallen more than 2 percent, due to which it has become one of Asia’s worst performing currency. About half of this decline has come in the last two weeks. That too at a time when Trump is constantly increasing the tariff. Two people aware of the case said in a Bloomberg report on the condition of not publishing the name that on several occasions last week, the central bank was seen stepping into the offshore market just before the start of domestic currency trade at 9 am in the Mumbai time.
So I Forex Reserve decreased
Relying on the so-called non-diligarable forwards allows the central bank to give direction to the speed of rupee without selling a large amount of dollars. Last year, the central bank trusted this strategy a lot. The RBI’s latest foreign exchange reserves also indicate an increase in intervention, with a decline of $ 9.3 billion in the store, the biggest fall since November, which has increased to $ 689 billion in the week ended August 1. A part of the fall may reflect evaluation changes in global currency, not only the sale or purchase of the central bank.
Rupee is coming up
The rupee rose by eight paise to 87.50 in early trade on Monday against the US dollar. Due to weakness in American currency, investors are waiting for signs from the upcoming dialogue between Russia and the US. Foreign currency traders said that the Indian rupee opened with a slight edge on Monday. It is expected to be within the range of 87.25 to 87.80 against the US dollar.
The rupee opened at 87.56 against the US dollar in the Interbank Foreign Currency Exchange Market, which shows an increase of eight paise in the previous closed price. The rupee closed at 87.58 against the US dollar on Friday. Meanwhile, Brent crude prices fell 0.48 percent to $ 66.27 per barrel in futures trading.
The dollar index, depicting a US dollar position against six major currencies, fell 0.11 percent to 98.07. According to the stock market data, foreign institutional investors (FIIs) on Friday bought shares worth Rs 1,932.81 crore.