A close watch is warranted on the foreign flows, both portfolio and capital account. In the first nine months of the calendar year 2022, RBI has drained over $100 billion from the forex reserves.
Gourinchas has also said it will be best if central banks of emerging and developing countries let their exchange rates adjust and conserve foreign exchange reserves for when conditions worsen
Besides, a stronger greenback against key rivals and persistent foreign fund outflows put pressure on the domestic currency.
Foreign exchange reserves were down for a seventh continuous week, dropping to USD 545.65 billion on September 16.
At the interbank forex market, the local unit opened at 81.45 against the greenback. It witnessed an intraday high of 81.30 and a low of 81.64 during the session.
Given the foreign exchange outflows, the RBI will have to supply liquidity to the money markets. How it chooses to do so is critical for interest rates and for the bond market in the months ahead
Forex traders said the US Fed's rate hike and escalation of geopolitical risk in Ukraine sapped risk appetite.
The RBI's forex intervention to contain volatility of the rupee’s exchange rate against the dollar and the resultant increase in the money supply is “neither inflationary nor elicits a policy rate response, the paper showed.
At the interbank forex market, the local unit opened at 79.70 against the greenback. It witnessed an intraday high of 79.58 and a low of 79.77 during the session.
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The Reserve Bank of India has sold a net of $38.8 billion from its forex reserves between January and July this year, data released on Friday showed.
Expectations that the RBI won’t need to match up the intensity of the US Fed in rate hikes have strengthened the view that the interest rate differential is set to narrow further in the coming months. A narrowing interest rate differential reduces the benefit of buying dollars in the future.
Foreign fund outflows and losses in the domestic equity markets also hit the rupee sentiment, forex traders said.
At the interbank forex market, the local unit opened at 79.30 against the greenback. It witnessed an intraday high of 79.03 and a low of 79.33 during the session.
At the interbank forex market, the local unit opened at 79.66 against the greenback. It witnessed an intraday high of 79.47 and a low of 79.72 during the session.
At the interbank foreign exchange market, the domestic currency opened at 79.93 per dollar. It hovered in a range of 79.84 to 79.94 during the session.
The central bank has been cautioning the public not to undertake forex transactions on unauthorised ETPs or remit/deposit money for unauthorised forex transactions
The rupee closed at 79.9625 per U.S. dollar, down from 79.8650 in the previous session.
According to figures from the Reserve Bank of India (RBI), the nation's foreign exchange reserves decreased by USD 6.687 billion to USD 564.053 billion in the week ending August 19.
At the interbank foreign exchange market, the local currency opened weak at 79.90 and moved in a range of 79.78 to 79.92 during the session
At the interbank foreign exchange market, the local currency opened at 79.75 and moved in a range of 79.73 to 79.84 during the day.
The Reserve Bank of India's net forward position dropped by a massive $18 billion in June as the central bank went short on the dollar in the 1-month segment.
At the interbank forex market, the local unit opened strong at 79.32 against the greenback and witnessed an intra-day high of 79.26 and a low of 79.48.
What's behind the rise and fall in a currency's value? We all know that the rupee touched a historic low and fell below the 80 mark to a dollar recently. But who decides what the rupee's value is - and what are the factors that affect it? Moreover, what can central banks of countries do to ensure that they provide a cushion against global factors? All the answers in this comprehensive video above!