India pushing Rupee as next global trade instrument
It is not just Western sanctions on Russia that accelerated the trend to circumvent the dollar, but the strength of the currency in the past year has also posed a challenge.
Extending its losses for the third session, the rupee weakened by 8 paise to trade at fresh 3-month low of 64.87 against the US dollar in opening trade ahead of RBI’s minutes for the latest policy meeting due later on Wednesday.
Besides heavy demand for the American currency from importers, persistent outflows by foreign funds and the dollar’s strength against other currencies overseas weighed on the domestic unit, forex dealers said.
A higher opening of the equity market today, however, capped the fall.
The benchmark BSE Sensex rose 207.77 points, or 0.61 per cent, to 33,911.36 in early trade.
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The rupee ended lower by 58 paise yesterday at 64.79 — its lowest in three months — on rise in capital outflows.
On a net basis, foreign investors withdrew Rs 850.35 crore yesterday, as per provisional data released by the stock exchanges.
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