The Indian rupee extended its losing trend, following cues from the equity market. At 90.07, it finished the day down 0.1%. The currency fell 0.2% from its opening level of 90.06 to 90.17 against the US dollar.
The US Federal Reserve’s impending policy decision on Wednesday, which is expected to impact the currency’s future course, and ongoing withdrawals by foreign institutional investors (FIIs) have caused the rupee to decline.
The Fed’s policy stance usually affects foreign capital flows. Domestic stocks were also impacted by the uncertainties brought on by these global indications.
Due to ongoing withdrawals of foreign investment, tensions over the stalled US-India trade pact, and increased tariffs imposed by US President Donald Trump on Indian exports, the currency broke the psychologically significant 90-level threshold for the first time on December 10. The rupee has been one of the worst-performing Asian currencies lately, with an overall decline of around 5%.
RBI Governor Sanjay Malhotra declared on Friday that to supply more liquidity to the market, the central bank will engage in Open Market Operations (OMO) purchases of Rs 1 lakh crore and a three-year dollar-rupee buy-sell swap for USD 5 billion in December. He explained that increasing market liquidity is the goal of the buy-sell swap.
