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.
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.
With the Reserve Bank of India's Inter-Departmental Group having expressed the view that the rupee possesses the potential of evolving into a global currency in the wake of India's resilient economic growth amid global challenges, the potential of such a development is significant for India's economic growth and international standing.
According to RBI's latest data, India's foreign currency assets, the biggest component of the forex reserves, fell by USD 4.38 billion to USD 509.691 billion.
The Pakistani rupee resumed its downwards slide on Thursday after two modest sessions as the "optimism surrounding the government and IMF talks scaled back", local media reported.
The Indian rupee came down against the US dollar on Monday, crossing the Rs 81 mark vis-a-vis a dollar.
It might be better for the Reserve Bank of India (RBI) to allow the rupee to depreciate a bit, letting it find its natural balance, said Soumya Kanti Ghosh in an SBI research report.
Continuing with the consistent depreciation, the rupee slipped further from the recent low and hit another lifetime low at 81.90 against the US dollar on Wednesday morning. In equity markets, Indian stocks extended their losses for the sixth straight session, dragged largely by broad-based selling in the global equities. At 10.08 am, Sensex and Nifty each traded 0.3-0.4 per cent lower.
The Indian rupee fell to a new record low of 81.55 against the US dollar on Monday after a sharp uptick in dollar index, dealers said.
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.
This morning, the Rupee opened 25 paise lower from the previous session to touch a record low of 81.09 versus the US dollar, against Thursday's close of 80.86. Yesterday's depreciation was the biggest single-day fall for the rupee since February 24.
