The rupee closed at a record low of 80.86 against the dollar compared to 79.9750 in the previous session. It was the biggest one-day drop since February 24th.
Traders interviewed by Reuters could not confirm whether the Reserve Bank of India intervened in the spot market during the session.
Reason
Some traders said the RBI may have intervened to stem the rupee’s decline, but the intervention was less aggressive. However, most traders interviewed by Reuters were unable to confirm whether the central bank intervened in the cash market during the session. Dealers at two state-owned banks denied the RBI had sold the dollar to stem the rupee’s decline.
The rupee continued to come under pressure during the session after the Fed released its hawkish outlook. The Fed’s 75 basis point rate hike was within expectations, but financial markets were stunned by the hawkish so-called Dot He plot.
Expectancy
The scatterplot shows interest rates will reach 4.4% by the end of the year, which means he’s up 125 basis points cumulatively over his two sessions in November and the rest of December. I mean Moreover, policymakers expect interest rates to rise to 4.6% by the end of 2023.
Against the backdrop of these forecasts, Asian currencies fell and stocks fell.
Given the current parent dollar and weak equity sentiment, the RBI is expected to focus on smoothing the move to 81 over the next few sessions, according to Kristal’s head of financial products, his It was Gautam Kumar’s idea. AI is a digital private property management platform based in Singapore.
In the medium term, we believe USD/INR will simply trade higher in the 80-82 range. The dollar index, which once hit a 20-year high of 111.80, fell as the Japanese yen surged after authorities intervened in the foreign exchange market for the first time since 1998.
