Tuesday 12 / November / 2024
Muscat: The Indian rupee (INR) has been depreciating against the US dollar (USD) and it crossed 84 during the first week of October 2024.
However, INR declined to an all-time low on Friday touching 84.38 and exchange houses were offering INR218.80 for OMR1 Rial. The Indian expats as well as exporters benefitted from this decline.
The Indian rupee (INR) has been depreciating against the US dollar (USD) and it crossed 84 during the first week of October 2024. However, INR declined to an all-time low on Friday touching 84.38.
Speaking to Times of Oman, R. Madhusoodanan, a financial expert based in Muscat said, INR crossed 219 against one OMR on Friday.
However, the Exchange Houses are offering 218.80. The Indian NRIs and exporters benefitted from this downfall. They are getting higher value for their money and merchandise.
The rupee has been undergoing pressure due to pullout by the foreign institutional investors(FIIs) from the Indian stock markets, the prevailing tension in the Middle East, and higher demand for forex from foreign banks and Oil companies on the expectation of higher crude prices.
However, the rupee witnessed a severe hit during the last few trading sessions.
The victory of Donald Trump, the latest cut in the interest rate by the US Federal Reserve by 25 basis points to a target range of 4.5% to 4.75%, and the likely changes in US tax and trade policies are the reasons for the hit.
The Dollar Index which tracks the strength of the USD against a basket of currencies strengthened and touched 104.95. Factors above may have far-reaching consequences on global markets, and volatility on the Indian rupee.
The RBI has been strongly intervening in the forex market to keep the fall marginal. The forex reserve of the country, which was above $700 billion has fallen to $ 682 billion as on 1st of November 2024 as per the data released by RBI on Friday.
He said Trump’s policies of tax and tariffs and other deregulations are likely to boost US growth, prompting investors to prefer the US dollar to the other currencies of the world, particularly Asian currencies. US Fed and Bank of England have reduced interest by 25 bps. RBI is also likely to follow the same in the next policy review. All these have a bearing on the rupee volatility trajectory.
Madhusoodanan is of the view that the INR may undergo more pressure in the days to come and may reach new heights by the end of March 2025.
