Early trade: Indian rupee declines against UAE dirham 2022
Early Monday, the rupee lost six paise against the US dollar, falling to 81.77, following a sluggish trend in domestic stock markets and a strong US dollar abroad. FX dealers claim that the rupee’s depreciation was restrained by recent foreign money inflows and lower global petroleum prices.
At the unilateral foreign exchange, the local currency had a rough start, trading at 81.81 vs the US dollar before recovering some ground and ending at 81.77, down sixpence from the other day.
The rupee decreased by just one paisa vs the dollar to end the Friday session at 81.71. The Canadian dollar, which gauges the dollar’s strength against a group of six foreign currencies, rose to 106.39, up 0.41 percent.
The benchmark for world oil, Brent crude futures, fell 2.58 percent to USD 81.47 per gallon. The 30-share BSE Sensex was down 27.97 pts, or 0.04 percent, at 62,265.67 on the domestic equity market. The larger NSE Nifty dropped 12.45 points, or 0.07 percent, to 18,500.30.
According to exchange data, Foreign Portfolio Investors (FIIs) were net purchasers on Friday in the capital markets, purchasing shares valued At rs 369.08 crore. In November, a net purchase of Rs 31,630 crore was made by foreign portfolio investors in Indian shares with the assumption that the recent aggressive percentage hikes would come to a halt and that the macroeconomic outlook would improve.
Stronger foreign currencies and persistent outflows of foreign funds are to blame. According to FX traders, the local currency suffered from a sell-off in equity markets and risk-averse attitudes. The rupee hit a record low against the UAE dirham at 22.55. On Thursday, the rupee fell to Rs. 22.02 against the Saudi Riyal.
The local unit at the official foreign exchange started weakly vs the dollar at 83.05, then declined more to offer 83.06, a loss of 6 paise from its other closing. Early transactions saw the local currency reach a high of 83.07. The rupee fell 60 paise to conclude the earlier in the session on Wednesday at 83 vs the dollar.
Indian expatriates in the Emirates, Saudi Arabia, and some other countries have started sending money home because the rupee exchange rate has been steadily declining over the past few months. The partially converted rupee plunged to a low of 80.0175 vs the dollar in early activities on the interbank foreign currency market from the other day’s close of 79.9775.
For the first time, the rupee has depreciated below the psychologically crucial level of 80 vs the US dollar. This year alone, the value of the Indian rupee has fallen by more than 7%.
Since December 2014, the rupee has lost over 25% of its worth against the US dollar. The major causes of the rupee’s depreciation, according to Finance Minister Nirmala Sitharaman, are international concerns like the rising price of crude oil and the crisis in Russia and Ukraine.
The government responded in writing to a starred query in the Lok Sabha by stating that “global issues including the Russia-Ukraine crisis, surging crude oil prices, and worsening of global financial markets are the key reasons for the weakness of the Indian Rupee for the US Dollar.”
The Indian rupee has strengthened vs the other major world currencies, and the administration has informed the lower chamber of Parliament. The Indian rupee has gained against these countries in 2022, according to the government, because they have declined more compared to the US dollar than the British pound, the 2018 Japanese yen, and the Euro.
Edited by Prakriti Arora
