On Wednesday, the rupee had breached the psychologically crucial 90-per-dollar mark due to the stalled trade deal with the US and continued foreign investor outflows from equities. The Indian rupee opened at 89.84, up 0.15% from its previous close of 89.97 against the US dollar. The currency pared some losses on likely profit-booking and is now seen consolidating.
Ponmudi R, CEO of Enrich Money highlighted that he sees the rupee trading “near the 89.50–89.80 range against the US dollar.” level. Further, likely intervention by the central bank also helped the Indian currency recover from its lifetime low.
Rupee slumped to historic low of 90.43 on December 4
On Thursday, the local currency had plummeted to an all-time low of 90.43 but staged a recovery after likely dollar selling by multiple foreign banks and reported intervention by the RBI.
“The broader trend remains bullish as long as 89.00–89.30 holds. A breakout above 90.50 could open the next leg of upside toward 91–92, while a decisive break below 88.80 may trigger a short-term corrective move toward 88.00.” Ponmudi R added.
Will RBI cut rates?
The focus now remains on the central bank’s decision on whether it will announce a rate cut or keep rates steady at 5.5%. A poll conducted by Financial Express shows that while some analysts expect the RBI to keep rates unchanged once again, others believe there could be a 25-basis-point cut this time.