Mallika Dureja
At 10:40 IST, the Indian rupee was worth 22.25 UAE dirham ($81.6650), which was down from 81.5225 the day before. The onshore Chinese yuan led the way for other Asian currencies to go up. When trading started again for the onshore yuan after a week, it went up 0.7% to be worth about 6.75 dollars.
Even though Asian markets are moving, the rupee isn’t doing much, said a spot trader at a private sector bank. At the start of trading, foreign banks were bidding on USD/INR, and the trader said that importers were probably also active.
Indian Ruppe on life time low level at 81.23 agaisnt a US dollar. #RupeeFalls pic.twitter.com/hb2Phlc6ld
— Surender Kumar 🇮🇳 (@Surender_10K) September 23, 2022
This week, the rupee will be affected by the US Federal Reserve’s policy decision and India’s federal budget, both of which are due on February 1.
For the Fed, a key indicator would be how the officials react to the markets’ predictions that interest rates will go down later this year. With a 25 basis point hike already planned, the actual rate decision is not likely to make a difference.
“Officials seem to support “standard” 25bp increases from now on, but most are warning that there is still more work to be done,” ING Bank said in a note.
“As a result, we expect to hear that the ongoing interest rate hikes are “appropriate” as long as the plan to reduce the size of the balance sheet stays the same.”
In the meantime, Indian stocks are having a rough day of trading after falling for two days due to a report on the Adani Group by short sellers. In early trading, the Nifty 50 Index (.NSEI) dropped to a level not seen in more than three months.
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The uncertainty about Adani could affect how much money comes in and out of the rupee. According to early exchange data, foreign investors sold more than $700 million worth of Indian stocks on Friday.
