The Indian rupee declined against the U.S. dollar today, almost reaching a new record-low level, as the domestic companies converted to dollars in order to pay for the imported goods.
Although, the risk-aversion level is quite moderate in the global markets today, the rupee falls as the Indian economy faces much greater risks among the other emerging countries. The drop in the dollar-denominated exports spurs the growth of the internal demand for dollars over their supply. The falling Indian stocks are also pressing hard on the national currency.
The analysts see the main reason for the rupees weakness in the internal demand for the foreign currency. The next problem they point out is the net sale of the Indian equities by the foreign funds, which totaled $1.8 billion this year. As long as this fundamental trend persists the INR wont be able to offer a consistently growing trend against the U.S. dollar.
USD/INR rose from 51.52 to 51.83 as of 9:16 GMT today after reaching as high as 52.10 during the early Asian trading session. The record-high rate of 52.19 was set by this currency pair on March 3.
If you have any questions, comments or opinions regarding the Indian Rupee,
feel free to post them using the commentary form below.
Be First to Comment