The Rupee Continues To Decline Against The Us Dollar

The rupee is being weighed down by tensions between the United States and Ukraine, high inflation in India, and fund outflows.

As a result of geopolitical tensions and higher inflation in India, the Indian rupee lost 0.783 paise against the Kuwaiti Dinar on Tuesday.

UN Chief expresses grave concern over Russian and Ukrainian actions. The rupee has also been hurt by heavy foreign fund outflows and high oil prices, according to forex traders. Those factors have a direct impact on the rupee. The rupee depreciated 12 paise against the US dollar at the Indian interbank foreign exchange market, opening at 75.60 against the dollar, then falling further to 75.72. 

On Monday, the rupee found its lowest level at 76.60 against the US dollar in over nine weeks, falling by 24 paise.

At the same time, the dollar index, which measures the dollar's strength against six other currencies, fell 0.18 percent to 96.19.

Retail inflation rates exceeded the Reserve Bank of India's six percent tolerance limit for the first time in seven months in January, while wholesale price indexes remained in double digits for the 10th month in a row.

In the wake of escalating tensions between Russia and Ukraine and the impact it may have on crude oil prices and interest rates worldwide, Sriram Iyer, senior research analyst at Reliance Securities, thinks greater appreciation bias might be curbed.

In addition, divergent policy outlooks of the Reserve Bank of India (RBI) and Federal Reserve, higher inflation in India, and inaction by the central bank to control inflation could also inhibit appreciation bias, Iyer said.

As a result, Brent crude oil futures fell 0.68 percent to $95.82 per barrel.

The Nifty rose 509.65 points or 3.03% to 17,352.45 points, while the 30-share Sensex was up 1,736.21 points or 3.08% at 58,142.05 points.

 

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