Kotak Mahindra Bank founder Uday Kotak on December 3 said Indian business should be ready to face the impact of Indian rupee hitting a record low of Rs 90 against US dollar and “shake out of comfort zone”.
The veteran banker blamed foreign institutions selling Indian equities and said for now they “seem smarter” as local investors continue their buying spree.
Also read: Rupee falls to a new low, crosses 90-mark against US dollar
“₹@90. The proximate reason: foreign selling of Indian stocks both FPI & PE under FDI. Indian investors buying. Time will tell who is smarter. For now, foreigners seem smarter. 1 year nifty $ return is 0. But this a long game. Time for Indian business to shake out of comfort zone,” Kotak said in a post on X.
The domestic currency on Wednesday continued its fall as it crossed the Rs 90-barrier to hit an all-time low amid persistent equity outflows and uncertainty over US-India trade deal.
The rupee opened at 89.96 against the dollar and slipped past 90.20 before making some recovery. It ended the previous session at 89.87.
"If the RBI support eases at 90, then we could see 91 also in this cycle," said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
The Reserve Bank of India’s monetary policy committee will hold its meeting between December 3 and December 5, with the interest rate decision to be announced on Friday. A rate cut by RBI could lead to further selling, but a weakened currency makes the MPC task difficult, Bhansali said.
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