Wednesday, November 30, 2022
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Rupee slumps to record low, caps off fourth weekly decline

The Indian rupee fell to a record low against the dollar on Friday amid concerns over the pace of interest rate hikes by the Federal Reserve and that US interest rates were likely to remain high for longer.

The rupee ended at 82.32 per US dollar, down from 81.88 in the previous session. The rupee opened at 82.20 and hit a record low of 82.4250 during the session.

The Reserve Bank of India has likely intervened again to slow the pace of the rupee’s decline, three traders told Reuters.

The rupee is down 1.2% this week, marking its fourth weekly loss.

The local currency has witnessed a rapid decline after slipping past the 80 level, down around 3.5% in the past month, with more losses likely ahead.

“We expect the currency to remain under pressure in the near term in light of the JP Morgan index (delayed withdrawal), the oil rally and the broad dollar strengthening trend,” said Gautam Kumar, head of financial products at Kristal.AI. , a Singaporean company. -based digital platform for private wealth management.

“Demand for the dollar continues as oil companies and defense and importers continue to buy,” said Anil Bhansali, head of treasury at Finrex Treasury Advisors.

“Fed officials are still aggressive, the euro prone to more falls, Asian currencies weak, oil up…all negative for the rupee.”

The rupee has now fallen nearly 11% so far in 2022, heading for its worst annual performance since 2013.

Widening spreads between the rupee and onshore forward rates boosted demand for the dollar on Friday.

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Asian currencies came under pressure Friday after Fed officials indicated, as they have done on previous occasions, not to slow the pace of rate hikes in their fight against inflation.

Traders are now waiting for US jobs data later in the day, with a robust report confirming bets that the Fed will issue more rate hikes.


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