The widespre ad misconception that the Reserve Bank of India’s (RBI) “intervention” (selling dollars), in India’s inter-bank “foreign exchange” (forex) market, by itself, depletes India’s dollar reserves, needs to be cleared.
The rupee drifting beyond the 90-per-dollar mark is not merely another data point in the market’s daily churn.
Indian businesses and Firms would do well to reinvigorate the “Made In India” as a hallmark of unquestionable Quality, the report suggested.
Wall Street pundits and investors are schizophrenic about the dollar. The dollar weakened after Moody’s cut the US credit rating by one notch from Aaa (the highest rating — to Aa1, attributing the downgrade to the increasing fiscal deficit, as well as the rising interest rate costs on Federal government debt.
As the Indian rupee reached a record low of 87.58 to the dollar on Thursday, it finds itself at a critical juncture, navigating a sea of global and domestic pressures.
Speaking at a media briefing on her official US visit, she explained that it was not the Rs weakening rather USD was strengthening.
The Indian rupee on Friday, depreciated 16 paise to its all-time low of 82.33 against the dollar owing to a rise in US bond yields and climbing crude oil prices.
On Thursday, the rupee plunged 32 paise to close at an all-time low of 81.94 against the US dollar. High volatility in the crude oil market led to the fall of the rupee.
This morning, it crossed 81.50 against the US dollar. On Friday, it closed at 81.25. Notably, last Thursday's depreciation was the biggest single-day fall for the rupee since February 24.
Much of the weakness in the rupee is on account of a strong US dollar index and not just because of India's domestic economic fundamentals, said SBI Research in its latest report.
