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Wednesday, February 1, 2023

1 Dollar Equals 82 Rupees Soon? Day Not Far Seeing The Indian Rupee’s Free Fall

New Delhi: The Indian Rupee’s continued depreciation against the US Dollar has been in the news since quite a long time now. When Indian Rupee was trading at the 78 plus levels against the US Dollar, the major concern was whether the former will depreciate beyond the psychological barrier of 80.Also Read – Key Takeaways & Assessment Strategy Behind Reserve Bank Of India's Monetary Policy Decision

But the 80 mark has crossed well and over now. At 4:04 pm IST today, Indian Rupee was trading at Rs 81.79 against the USD, that’s even more closer to the 82-mark. Also Read – Looming Rate Hikes? What To Expect On Friday From RBI's Monetary Committee Meet Starting Today

The fall of Indian Rupee becomes more significant when it happens at the start of the final quarter. The Rupee had plunged as low as 81.89 per dollar today that is not very low from its record low of 81.95 per dollar. Also Read – India's War-Chest Falling Faster Than War's Fading Pace — Report Says 'RBI Fighting Lost INR Battle'

Meanwhile, a Reuters report said the Reserve Bank Of India (RBI) likely sold dollars via state-run banks on Monday as rising oil prices and weak risk appetite pushed the rupee to within striking distance of record lows. The report added that the intervention by the RBI was confirmed by two bankers and two brokerage firms. It quoted one of the bankers who said this intervention by the RBI was similar to the recent sessions where RBI is trying to make sure that the Indian Rupee doesn’t fall below 82.

On the contrary, according to a recent research report by the Bank of Baroda, the RBI is unlikely to aggressively defend the Indian currency against the US Dollar.

“Given the global backdrop of a strong dollar and continued weakness in other currencies, it seems likely that the RBI may not be as aggressive as in the past to curb the decline in the exchange rate. Hence, we may see the rupee depreciating further, and a move closer to 82 per dollar cannot be ruled out. Everything depends on what the RBI does and absence of active intervention will be interpreted as the present range around 81 per dollar being acceptable,” a Bank of Baroda report said.

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