Tuesday saw a decrease in the value of the Indian rupee as early election results trends fueled widespread demand for dollars despite uncertainty over the performance of the alliance led by Indian Prime Minister Narendra Modi.
As of 8.25 a.m. local time, the rupee was trading at 22.713 against the UAE dirham, down from 22.654 during the previous session. Early in trading, the rupee fell as low as 22.735 intraday. According to a foreign exchange salesperson at a private bank, early trends indicate that Prime Minister Narendra Modi’s alliance is leading, but the final count may not match the projections of exit polls.
Fears over the outcome of the election caused the BSE Sensex and Nifty 50 Indian equity indices to drop by almost 3%, while bond yields increased.
Given what the exit polls had shown, it is “clear that markets are not too happy.” It is evident in the bond, FX, and equity markets,” said Kunal Kurani, associate vice president of Mecklai Financial.
The rupee was struggling while its Asian counterparts saw gains following a decline in Treasury yields triggered by less-than-expected US manufacturing data.
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