The rupee weakened against a rising dollar on flight-to-safety bets, driven by ongoing concerns about how aggressive interest rate hikes by major central banks would affect global economic growth and company profits.
According to Bloomberg, the rupee was at 82.91 per dollar after opening at a weaker 82.82 compared to its previous close of 82.82.
PTI reported that the domestic currency fell 12 paise to 82.91 against the US dollar in early trade.
“Yesterday RBI intervened by selling over $1 billion and the rupee rose to 82.70 from a low of 83.2325. In the non-delivery futures (NDF) market, the rupee was at 82.66 this morning before going down to 82.85 for Anil Kumar Bhansali, Head of Treasury at Seema Finrex Treasury Advisors, said the day is expected to range from 82.50 to 83.20 with a close watch on RBI.
“Exporters will hold onto their receivables with the moratorium at 82.50, while importers will have to continue buying to hedge their import dues before a short holiday next week on account of Diwali festival,” he said.
Concerns that controlling inflation could force major economies into recession before they can be controlled, and that the Fed’s policy as a stronger dollar will aggressively devastate emerging market economies, have been grim in global markets in recent weeks. instability has arisen.
A trader at a Mumbai-based bank told Reuters that moves in emerging market currencies are “clearly relevant”, but “at current levels and after what happened yesterday”, the RBI and the overall position of the interbank is more important. . ,
According to traders, the domestic currency hit new lows on Thursday, with the central bank actively selling dollars. After intervening in the afternoon session, the rupee recovered sharply, climbing around 82.75 from its new record low of 83.29.
As in previous sessions, RBI continued its recent practice of buying and selling swaps along with spot dollar transactions, thereby reducing forward premiums.
The Mumbai-based trader said, “RBI will continue to dominate both the spot and forward markets.”
Asian currencies continued to fall on Friday as selling in US bonds showed no signs of abating. The yield on the 10-year Treasury hit a new 14-year high after data suggested the US labor market was holding up well.
The dollar was stable and the pound fluctuated after Liz Truss resigned as UK prime minister.
The Japanese yen was last trading at 150.20 against the dollar, nearing a 32-year low. The currency first fell beyond the 150 mark in Tokyo late on Thursday.
Even though there has been no sign of additional action since the finance ministry’s dollar-selling, yen-buying intervention last month, investors are on high alert because of recent threats of interference from Japanese officials.