New Delhi (Agency): The Indian rupee slipped further, closing at an all-time low of 83.12 against the US dollar on Monday, August 21, 2023. The local currency depreciated by 2 paise in the day’s trading, influenced by various domestic and international factors.
At the interbank foreign exchange market, the rupee opened at 83.10 against the dollar and fluctuated between 83.05 and 83.13 throughout the day. On Friday, the currency had closed at 83.10, which was also an all-time low at that time.
Several factors contributed to the rupee’s depreciation:
– urge in Crude Oil Prices: The increase in global crude oil prices put pressure on the rupee. Brent crude futures, the global oil benchmark, advanced 0.64% to USD 85.34 per barrel.
– Foreign Investors Selling:** Selling pressure exerted by foreign institutional investors contributed to the decline. On Friday, they had offloaded shares worth Rs 266.98 crore.
– S Dollar Dynamics:The weak tone in the US dollar, following the Chinese central bank’s rate reduction, provided some cushioning for the rupee. However, the overall strength of the US dollar, along with the hawkish stance of the US Federal Reserve, overshadowed this effect.
Forex traders, including Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, anticipate the rupee to trade with a negative bias due to the factors above. The expected trading range for the USDINR spot price is Rs 82.80 to Rs 83.50.
The dollar index, which measures the greenback’s strength against six other major currencies, fell 0.14% to 103.23.
In a positive note for the Indian economy, the country’s foreign exchange reserves jumped USD 708 million to USD 602.161 billion for the week ended August 11, marking the first increase after declining for three consecutive weeks.
The situation with the rupee reflects the complex interplay of global and domestic economic factors. Investors and policymakers will be watching closely for cues from the BRICS summit and the Jackson Hole Symposium, as well as potential interventions by the Reserve Bank of India, to gauge the future trajectory of the currency.
