Rupee drops 26 paise at almost 4 weeks against the dollar
The rupee fell 26 paise to close at a nearly four-week low at 73.87 against the US dollar on Wednesday due to a stronger dollar in foreign markets ahead of the outcome of the US Fed and US dollar meeting. concerns about Evergrande’s situation in China.
Forex traders said investors were awaiting indications of the reduction schedule and the US Fed’s projections for interest rates. The outcome of the US Fed meeting will be announced later today.
In the interbank forex market, the local currency opened at 73.70 and had an intraday high of 73.66 and a low of 73.93 against the US dollar in day trading.
Local unit eventually settled at 73.87 per dollar, the lowest closing level since August 26. On Tuesday, the rupee stood at 73.61 against the US dollar.
The dollar index, which measures the strength of the greenback against a basket of six currencies, was trading up 0.02% at 93.22.
The Indian rupee depreciated against the dollar on Wednesday, following losses in regional currencies. Most Asian currencies were weaker before the Fed’s decision and concerns about Evergrande’s situation in China weighed on it. ‘local unit,’ said Sriram Iyer, senior research analyst at Trusted Securities.
Investors are wary of the Fed meeting tonight, and some expect the Federal Reserve to provide more clues about reducing its asset purchases later.
âTonight’s Fed meeting will be closely watched. The market expects the US Fed to announce a reduction schedule, issue inflation forecasts and update its interest rate projection via a dot plot. We expect the USDINR to remain in the 73.40-74.20 range over the near term, âsaid Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.
Meanwhile, HDFC Bank economists said in a report that the rupee may come under pressure as emerging market currencies face headwinds due to events surrounding Evergrande in China.
âWe remain cautious about this transformation into a broader risk scenario, which could mean increased pressure on emerging currencies, including the INR (rupee), as the dollar remains long,â the report said. ‘a team led by Abheek Barua.
Evergrande, China’s largest real estate player, is under financial pressure. He has more than $ 300 billion in liabilities and has an interest payment of $ 83.5 million on a bond due Thursday and $ 47.5 million next week.
The world is watching events closely, especially to see if the company is delivering on its commitments, and some observers compare it to the Lehman Brothers case in the United States that led to the 2008 global financial crisis.
Futures on Brent crude, the world’s benchmark for oil, rose 1.24% to $ 75.28 per barrel.
On the national stock market front, the BSE Sensex finished down 77.94 points or 0.13% to 58,927.33, while the broader NSE Nifty index lost 15.35 points or 0. 09% to 17,546.65.
Foreign institutional investors were net buyers in the capital market on Tuesday as they bought shares worth Rs 1,041.92 crore, the exchange data showed.
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