Dollar vs Rupee: The Indian Rupee has fallen to a historic low and has crossed the 90 level against the US Dollar. The rupee fell 10 paise to 90.15 per dollar in early trade on Tuesday. This decline is being seen just before the US Fed’s decision. Apart from this, lack of significant progress so far in the India-US trade deal is also being considered a major reason for the weakness of the rupee.
and broken rupee
US President Donald Trump has threatened to impose new tariffs on Indian agricultural products, especially rice. Along with this, a warning has also been given to impose tariff on Canadian fertilizers. Trump said in the White House that cheap imports are creating problems for American farmers. According to foreign exchange traders, investors have become cautious due to the increasing demand for US dollars.
In the interbank foreign exchange market, the rupee opened at 90.15, which shows a decline from Monday’s 90.05. Meanwhile, the dollar index fell 0.04% to 99.04. Weakness was also seen in the domestic stock market, where the Sensex opened 381.91 points down at 84,720.78 and later fell by 700 points. Banking, metal and IT stocks have seen the biggest decline.
What do experts say?
On Friday, the rupee ended trading at 89.95 against the US dollar after the RBI cut the repo rate for the first time in 6 months. According to Anuj Chaudhary, Research Analyst, Mirae Asset Sharekhan, the rupee is likely to remain under pressure due to continuous withdrawal of foreign institutional investors (FIIs) and weak domestic markets. He further said that weakness in the dollar may give some support to the rupee at lower levels amid expectations of interest rate cut by the Federal Reserve in December. Possible intervention by RBI may also provide support to the rupee.
Chaudhary says that the dollar-rupee spot rate can trade in the range of Rs 90.05 to Rs 90.75. At the same time, Reserve Bank Governor Sanjay Malhotra had said on Friday that the central bank does not set any fixed range for the rupee in the foreign exchange market, but gives the domestic currency the freedom to find its actual level as per the market conditions.
Nifty-50 also slipped 139.55 points to reach 25,821.00. Brent crude fell 0.19% to $ 62.37 per barrel. According to the data, foreign institutional investors (FIIs) remained out of the market on Monday with selling of Rs 655.59 crore.
Also read: Gold’s shine has faded, know how cheap the rate became from Delhi to Chennai on December 9
