The rupee plunged 90 paise to the US dollar on Monday as the dollar index strengthened on US jobs data.
The Indian currency has also come under pressure as banks reportedly bought dollars on behalf of Adani Group backers, who are looking to prepay some of their loans and release pledged shares, and in the absence of RBI intervention.
The rupee closed at 82.7250 to the US dollar, down 1.1 percent from the previous close of 81.8250. Monday’s close is also the lowest in more than four months.
Amit Pabari, MD, CR Forex Advisors, said: “The rupee fell sharply against the USD by more than 1 percent in just two sessions, as the DXY (Dollar Index) jumped more than 1.54 percent after the US NFPs (non-farm) were stronger than expected.) Due to upbeat US jobs data, markets began to bet that the Fed would continue its aggressive rate-hike path ”.
In addition, Adani Group made a prepayment of $1.1 billion on its dollar-denominated bonds, which pushed the rupee lower. FII’s continued exits from local stocks continued to hurt the local currency, he added.
Anindya Banerjee, a vice president at Kotak Securities, noted that the rupee continues to underperform its peers due to FPI outflows and a lack of carry trades. “In the short term, we expect a range of 82.30 and 83 spot,” she said.
