The Indian rupee plummeted to a record low on Wednesday, driven by the unwinding of carry trades and increased dollar demand from importers. Despite intervention from the Reserve Bank of India, the rupee continues to face pressure from investors exiting carry trades that used the Chinese yuan and Japanese yen. Experts anticipate continued downward pressure on the rupee in the near term.
Indian equity markets opened lower on Thursday, mirroring a decline in global markets. The currency market witnessed the Indian Rupee opening slightly lower against the US dollar. Meanwhile, the Nifty bank index faced pressure due to a significant drop in Kotak Mahindra Bank shares following regulatory actions from the RBI.
The Indian rupee experienced a narrow range of fluctuation before marginally rising by 1 paisa against the US dollar on April 24th, settling at 83.30. The strengthening support from positive domestic equities was offset by the rising value of the American currency. Forex traders attributed this movement to elevated crude oil prices and substantial foreign fund outflows in the global market, which dampened investor sentiment. Additionally, geopolitical tensions in the Middle East added uncertainty to the market outlook.
The Indian rupee gained against the US dollar in early trade on Tuesday. The local unit opened at 83.37 against the greenback and later reached 83.30, marking a rise of 6 paise from its previous close. The positive sentiment in domestic equity markets, along with the absence of adverse geopolitical developments, contributed to the rupee’s appreciation.
