In spite of the US dollar index declining significantly over the past week, the rupee is still strengthening against the global reserve currency.
Other currencies benefit from the dollar’s decline. The rupee’s opening price against the US dollar was 80.52, down from Friday’s closing price of 81.80.
For the record, the Indian rupee has been declining during the previous few weeks to achieve brand-new all-time lows, with the exception of the most recent rebound in November.
The rupee broke over the 83 level for the first time ever in October. The rupee has declined by about 8–9% so far this year.
“It (rupee) may remain weak-to-volatile for a while, but we think the worst is largely over for the currency,” Seshadri Sen, Head of Research at asset management company Alchemy Capital Management told ANI.
Sen said the Indian currency rupee had weathered the storm in the face of heavy selling by foreign institutional investors, monetary policy tightening by the US Fed, and the ongoing war in Ukraine which led to high international oil prices.
Meanwhile, benchmark stock indices Sensex and Nifty traded largely steady at 61,762.64 points and 18,362.75 points this morning, respectively.
Investors would be now focused on India’s retail inflation data for October scheduled to be released later today.
Retail inflation in India rose to 7.41% in September, continuing beyond the stipulated range of 2-6% for the third straight quarter.
The RBI is regarded to have failed in managing price hikes under the flexible inflation targeting framework implemented in 2016 if CPI-based inflation is outside the 2-6 percent range for three quarters in a row.
In this context, an out-of-turn meeting of the Reserve Bank of India’s Monetary Policy Committee (MPC) was conducted on November 3 to debate and prepare the report to be given to the central government for failing to satisfy the inflation mandate.