Early on Friday, the US dollar saw a 6-paise decline against the Indian rupee (22.74 against the UAE dirham), bringing the currency closer to its all-time low as crude oil prices continued to surge due to increased geopolitical tensions and possible supply concerns. On Thursday, the South Asian currency fell to a record low of 83.4550.
According to a private bank foreign exchange trader, geopolitical concerns have caused a global shift in mood away from risk, which might be detrimental to the rupee.
The Asian currencies saw a decrease, with the Korean won down 0.4% and leading losses, while the dollar index was a little higher at 104.32.
The trader stated that “if the RBI doesn’t intervene or if it does mild intervention as it has been over the last few days,” the Indian rupee may drop below the 83.50 (22.75 vs UAE dirham) line today.
According to a Reuters poll of economists, the central bank is widely expected to keep rates unchanged for a seventh consecutive meeting. We maintain our call for the (RBI) rate cut cycle to start at the tail end of 2024, with a cautious central bank’s tone to be rupee-supportive soon,” DBS Bank said in a note.
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