Indian rupee to under-perform most currencies
Besides opening from lower in domestic equity market, PTI reports stated that fresh demand for the currency from importers also heated up the rupee. However, the dollar weakness against some currencies overseas, restricted the rupees losses.
Rupee depreciates on Monday morning trading session driven by Raghuram Rajan exit from its governor-ship of RBI. At 10.03, the local currency was trading at 67.43 down by 0.55%.
The rupee opened at Rs. 67.07 touching its low. The day’s range is around 67.07 – 67.67. Looking at the historical data, Rupee surpassed its May 25 lows when it fell 0.53%, at Rs 67.27 to a dollar.
Besides opening from lower in domestic equity market, PTI reports stated that fresh demand for the currency from importers also heated up the rupee. However, the dollar weakness against some currencies overseas, restricted the rupee's losses.
On Friday, rupee had recovered 13 paise to 67.08 against the dollar on back of fresh selling by bankers and exporters and recovery in stock markets.
Rajan’s exit news reflects disappointment on the currency markets which are currently haunted by uncertainties with the Brexit referendum due on June 23 and the upcoming redemptions of foreign currency non-resident (FCNR) deposits.
Most FPI investors view, India as a preferred and stable market in an uncertain world given the powerful appeal of its macro-economic stability, ongoing economic and social reforms and long-term growth prospects. They will now have to struggle with India’s ‘Rexit’ and a possible ‘Brexit’ in the next few days.
“In the near term, we expect the INR to underperform most currencies in the region, irrespective of the Brexit vote outcome.We haven’t made any changes to our forecasts recently. Our forecasts remain 67.75 for end-June and 68.25 for end-September,” said Divya Devesh, Asia FX Strategist at Standard Chartered Bank, on Livemint.
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