The Rupee closed at a lifetime low on Friday at 83.3675 per dollar amid weakness in Asian currencies and strong demand for the greenback from importers.
The Indian unit closed about three paise down vis-a-vis Thursday’s close of 83.3425.
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Rahul Kalantri, Vice President, Mehta Equities Ltd, attributed the Rupee’s weakness to increased demand for US dollars from importers and a general softness in Asian currencies.
“The dollar index, unable to sustain its lower position, rebounded, contributing to the rupee’s weakness. We anticipate a slightly negative trajectory for the rupee, influenced by global market weaknesses and the prospect of a rebound in the US Dollar index.
“However, inflows from IPOs and a weak tone in crude oil prices might offer support to the domestic currency. We expect a pair could trade in the range of 83.20-83.55,” per Kalantri’s assessment.
Madan Sabnavis, Chief Economist, Bank of Baroda, observed that exporters are holding back (dollars) to make a gain expecting the rupee to come down while importers have asked their banks to buy dollars now for future payments. This has led to a mismatch in demand and supply which has pushed down the rupee.
In his recent speech at a Conference organised Jointly by FICCI and IBA, RBI Governor Shaktikanta Das underscored that on the exchange rate front, the Indian rupee (INR) has exhibited low volatility and orderly movements relative to peers despite elevated US treasury yields and a stronger US dollar.
“Movements in the INR are consistent with the strength of the underlying macro-fundamentals and the reassuring availability of buffers,” he added.