Drifted lower on persistent dollar demand from oil marketing companies and FPIs
The rupee closed at an all-time low of 77.7650 per dollar on Thursday due to demand for the greenback from oil marketing companies and foreign portfolio investors.
The Indian unit weakened notwithstanding central bank intervention. On Wednesday, it had closed at 77.73 per dollar.
The rupee opened weaker at 77.75. However, it drifted lower on persistent dollar demand from oil marketing companies, testing an all-time intraday low of 77.8025.
Dollar sales by banks on behalf the central bank pulled it back from intraday low.
“Sword is still hanging on the rupee amid persistent foreign institutional investors’ selling from emerging markets leading to Asian currencies weakening, elevated oil prices, and revised upward inflationary pressure for coming quarters,” said Amit Pabari, MD, CR Forex Advisors.
However, the only ray of hope for rupee presently will remain RBI, which has actively and aggressively participated to protect rupee from the heat so far, he added.
Reserve Bank of India Governor Shaktikanta Das, in his Monetary Policy Statement on Wednesday, observed that the faster pace of monetary policy normalisation undertaken by systemic advanced economies (AEs) is leading to heightened volatility in global financial markets.
“This is reflected in sharp corrections in major equity markets, sizeable swings in sovereign bond yields, US dollar appreciation, capital outflows from EMEs and even from some AEs. The EMEs are also witnessing depreciation of their currencies.
“…The rupee has moved in an orderly fashion and has depreciated by 2.5 per cent against the US dollar during the current financial year so far – faring much better than many of its EME peers,” Das said.