The rupee was down on Friday by the U.S dollar earning strength globally and the sustained greenback purchases by foreign investors, who continued to sell the shares in the Indian equity market in the wake of the U.S. Fed rate hike.
The Indian unit decreased about 66 paise to close at 76.9150 per dollar against the previous close of 76.25. This is the lowest closing price for the rupee in last two months. However there was a mild central bank interruption in the market, the direction was towards downward of the Indian unit.
“The rupee decreased due to a couple of factors. First, the most generally followed representative dollar index raise to a two decade high, which moved into a larger all currency weakness. Secondly, stock indices in the U.S. suffered huge losses yesterday the advance effect of which saw Asian indices selling off, guiding to home currency weakness.” said, RK Gurumurthy, HeadTreasury, Dhanlaxmi Bank.
With crude oil prices also at uplifted levels, the corresponding factors for the rupee’s movements supported a weakening trend, he added. IFA Global, in a report, noted that the USD-INR pair raise as rapid shifts towards higher interest rates by major central banks across the world soured the outlook for emerging market assets, putting damage on domestic equity and bond markets.
