Rupee sinks to 10-month low, slips below 83

The rupee and other Asian currencies were hammered as 10-year US yield rose.

The Indian rupee on August 14 morning slipped below the 83 mark against the dollar for the first time in 10 months, tracking losses in the global equities and currencies market as a jump in US yields piled pressure.

At 9.10 am, the currency was trading at 83.06, down 0.25 percent from its previous close of 82.84. The home currency earlier hit a low of 83.08, a level last seen on October 20, 2022.

Globally, both equity and currency markets continued their decline following gains in crude oil prices, which approached the $87 a barrel threshold. A series of disappointing economic figures from China also weakened sentiments.

The release of US inflation figures, revealing a lower-than-expected increase compared to initial projections but still higher than the previous data, along with the Producer Price Index (PPI) data surpassing predicted levels, played a role in bolstering the dollar's position.

CR Forex anticipates that robust intervention by the Reserve Bank of India (RBI) could offer support for the currency pair, preventing it from dipping into the range of 82.90 to 83.25. There is a possibility that market sentiment may shift towards the levels of 82.50 and 82.

"In light of this situation, exporters are advised to judiciously capitalise on the prospects that arise due to potential appreciation in the rupee's worth. They should explore various avenues for selling," CR Forex report added. Importers should exercise prudence and wait for suitable hedging options to emerge before finalising their decisions, it said.

Asian currencies were trading weaker amid a strong dollar and as concerns about China's wobbling economic recovery weighed on sentiment.

The 10-year US yields rose to 4.18 percent, while Asian currencies took a tumble. The Philippines peso fell 1.1 percent, the Indonesian rupiah 0.76 percent, the South Korean won 0.74 percent, the Malaysian ringgit 0.53 percent, the Taiwan dollar 0.46 percent, China's renminbi 0.29 percent, the Thai Baht 0.27 percent, the China Offshore 0.25 percent and the Singapore dollar was down 0.24 percent.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 103.02, up 0.17 percent from its previous close of 102.84.

(with Bloomberg, Reuters inputs)