Rupee Hits 90 Against Dollar: What It Means for Your Wallet Today
The Indian rupee breached 90 against the US dollar due to FPI outflows and stalled India-US trade talks. RBI policy decision awaits.
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On Wednesday, the Indian rupee surpassed the 90-mark against the US dollar by opening at 89.96 and rapidly dropping to 90.1325, this the result of constant foreign portfolio investments (FPI) outflows as well as India and the United States' trade negotiations that came to a standstill. In the last trading session, the domestic currency had finished at 89.87.
The currency experts identified the constant selling pressure as well as uncertainty surrounding the India-US trade negotiations as the main reasons for the fall, even though there had been some softening in the US dollar index.
“USD/INR is likely to trade between 88.90 and 90.20 today. There is strong support around 88.80 to 89.00. A decisive move below 89 would suggest that the rupee has done ready to take back some power over the dollar,” expressed Amit Pabari, managing director at CR Forex Advisors.
Finrex Treasury Advisors' Anil Bhansali, head of treasury, remarked that if the Reserve Bank of India (RBI) intervention at the 90 level becomes less frequent, the rupee might hit 91 during this cycle.
The meeting of the monetary policy committee of the RBI is to take place later today, and the interest rate announcement is going to be made on December 5. The meeting is just a few days before the US Federal Reserve is expected to unveil its rate decision on December 10.
Analysts said that a possible rate reduction by the RBI could lead to a further decline in the currency, thereby making central bank policy decisions more complicated amid a depreciating rupee situation.
