The downward trend in the rupee continues. It has slipped even lower, past its previous all-time low of 89.75/$. It has hit 89.85/$ levels in early trade after opening at 89.76/$, dipping past its Monday lows.
The local currency was down 0.24% due to a mix of speculative positions and corporate dollar demand, Reuters quoted traders as saying. According to Reuters, the local currency recovered to 89.7625 following RBI’s intervention, it added.
Rupee down on strong dollar
Speaking on the currency’s movement, Devarsh Vakil, Head of Prime Research at HDFC Securities said, “The Indian rupee extended its losing streak to a fourth consecutive session, hitting a fresh record low against the US dollar amid strong dollar demand and tight supply. A wider trade deficit is driving the persistent weakness, delays in the India–US trade agreement and relatively limited central bank intervention, with the rupee closing about 10 paise lower at 89.56 against the greenback.”
Whether RBI will cut rates at MPC?
The market now awaits the RBI’s rate decision as the MPC meeting kickstarts on December 3–5. Some economists expect a quarter-point rate cut by the central bank due to low inflation, while others expect no change given the strong GDP growth rate and the declining value of the Indian currency.