![]() Since 2020, the RBI has started to intervene in the offshore market through domestic banks, dealers said.Īccording to the Bank of International Settlement’s last triennial survey held in 2019, the rupee’s volumes in offshore markets surpassed that of the onshore market. That creates a counter to what the RBI is doing,” a source said. “The RBI is saying that every time they come and intervene in the spot market, the on-shore prices (of the dollar) could fall more here than offshore, so Indian banks would buy here and then they would go and sell dollars in the offshore market. This has quickened the pace of the rupee’s depreciation and, to a certain extent, blunted the effectiveness of the RBI’s dollar-selling interventions in the spot market – a point that the RBI was said to have made to banks. With the Fed’s aggressive rate hike stance and a recent jump in crude oil prices leading to the rupee depreciating at a faster pace in the offshore market, some banks have been purchasing the greenback at lower levels in the domestic spot market and then selling offshore, sources said. The bulk of offshore rupee activity is conducted in London, Singapore, and New York.Īn email sent to the central bank on the issue remained unanswered till the time of going to the press. Multiple sources told Business Standard that over the past couple of days, the RBI has been nudging banks to ease up on certain positions in the offshore non-deliverable forwards market, which the central bank does not directly regulate. The local currency has depreciated 2.9 per cent since that day, breaching past successive psychologically crucial levels. The rupee has suffered an intense spell of weakness since September 21 after the Fed signalled a longer-than-expected US rate hike cycle. The domestic currency, which has depreciated 9.7 per cent versus the US dollar so far in 2022, took a beating on Friday as officials of the Federal Reserve reiterated an aggressive path of rate hikes. The rupee weakened 0.5 per cent to close the day at 82.33 a dollar. The Reserve Bank of India (RBI) is said to have been nudging some banks to slow down on market positions in the offshore segment which have aggravated the fall in the local currency in the last two days, multiple sources said. On the domestic equity market front, the 30-share BSE Sensex was trading 357.3 points or 0.62 per cent higher at 58,422.77, while the broader NSE Nifty advanced 109.25 points or 0.63 per cent to 17,383.55.įoreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth Rs 1,344.63 crore, as per exchange data.The rupee hit a new low on Friday, crossing the 82-a-dollar mark for the first time amid the US Federal Reserve’s unrelenting commitment to raise interest rates. Global oil benchmark Brent crude futures surged 0.13 per cent to USD 93.49 per barrel. ![]() ![]() The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.35 per cent to 110.81. However, stronger crude oil prices, hawkish rhetoric from Fed officials and JP Morgan's decision to hold off the inclusion of Indian bonds into its global index weighed on the local unit, Iyer added. ![]() Moreover, Asian and emerging market peers were also stronger this Thursday morning and lent support. The forex market was closed on Wednesday on account of Dussehra.Īccording to Sriram Iyer, Senior Research Analyst at Reliance Securities, the rupee opened stronger tracking a fall in the dollar over the past two sessions. On Tuesday, the rupee appreciated by 20 paise to end at 81.62 against the US dollar. In initial trading, the rupee also touched 81.51 against the American currency. ![]()
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