Rupee faces headwinds – IBTimes India

The Indian rupee is going through headwinds as larger yields on US bonds and rising crude oil costs within the international market have firmed up the demand for {dollars}.

According to market analysts, whereas the Reserve Bank of India (RBI) has succeeded in protecting the volatility of the rupee in examine by releasing US {dollars} from its reserves, this can not proceed past a degree as there was a steady decline in India’s international change kitty in current weeks.

The rupee was buying and selling at 83.27 vis-a-vis the US greenback in pre-midday commerce on Wednesday down from 83.25 within the earlier session.

The RBI has been constantly intervening within the foreign exchange market throughout October to forestall the rupee from falling under the low of 83.29 vs the US greenback. Traders stated.

India’s international change reserves fell by $2.36 billion to $583.53 billion throughout the week ended October 20, in response to RBI information launched on October 27.

In the previous week the nation’s foreign exchange reserves had elevated by $1.15 billion, reversing a steady decline over the earlier 5 weeks.

The nation’s international change reserves had fallen by $14.166 billion to a 5-month low of $584.74 billion for the week ended October 6.

With the recent decline the foreign exchange reserves have fallen even additional.

Any sharp decline within the nation’s foreign exchange kitty leaves the RBI much less headroom to intervene available in the market to stabilise the rupee which might weaken the Indian forex.

(With inputs from IANS)