Weak macroeconomic environment, Moody’s changed outlook on India and global factors are among the key factors that are keeping the rupee wobbly.
The increase in reserves in the reporting week was mainly on account of a jump in foreign currency assets (FCA), a major component of the overall reserves.
The Reserve Bank of India's active presence in the forex (FX) markets has added to the surfeit, as also evident in the sharp jump in the FX reserves to a record high ($442.6 billion), observed DBS.
On technical charts, USD-INR October futures has given an upward break of descending channel and right now trading with rising channel indicating short term uptrend.
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Forex traders said market sentiment remained fragile ahead of the US-China trade meeting.
In the reporting week, foreign currency assets, a major component of the overall reserves, increased by $15.2 million to $398.739 billion, the apex bank said on August 16.
The Usha Thorat committee on the subject stops short of suggesting capital account convertibility.
The reserves had touched a life-time high of $430.376 billion in the week to July 19, 2019.
Trading on the RBI-notified FX-Retail will start from 5 August, though registration for the retail forex trading platform opens from 1 July itself. Initially, banks would only accept electronic transactions and may not settle trades for hard currency
As a further facility for retail clients, the RBI said no transaction charges will be levied by the CCIL on transactions of customers if the transactions do not exceed $50,000 per day.
Expressed in dollar terms, foreign currency assets include the effect of appreciation/depreciation of non-US units like the euro, pound and the yen held in the reserves.
On a weekly-basis, however, the Indian currency registered a marginal gain of 2 paise. The rupee had registered losses in the previous two successive weeks.
Watch the video for a roundup of key happenings in the commodities market with a deep dive into some of the most active counters.
The reserves had been declining in the past few weeks as the Reserve Bank of India (RBI) is selling the US dollar to contain depreciation in the rupee, which breached the 71 mark against the greenback today, its lowest ever.
The reserves have been declining in the past few weeks as the Reserve Bank is selling the US dollar to contain depreciation in the rupee.
The forex reserves had touched a record high of $426.028 billion in the week to April 13, 2018.
The Indian currency yesterday crashed to a life time low of 70.09 on concerns over Turkey's economic woes that have impacted various emerging markets.
Caught in a fresh wave of global currency turbulence, the Indian unit fell by a staggering 23 paise to end at 68.83.
However, suspected currency market intervention by the Reserve Bank of India through state-run banks largely helped the local unit to cut short early steep losses.
Currently, monthly contracts are available on all approved currency pairs, including USD-INR currency pair.
Overnight forex can be a nightmare and you may never know how rates turn out
These concerns mainly reflect the increasing volatility in currencies amid an uncertain macroeconomic and geopolitical outlook.
Meanwhile, country's foreign exchange reserves fell by USD 3.039 billion to USD 410.070 billion in the week to June 15, a RBI data showed.
Meanwhile, Indian bond markets staged a rebound after two-day intense selling and the 10-year benchmark bond yield finished lower at 7.95 percent after briefly climbing 8 percent in early trade. The RBI, meanwhile, fixed the reference rate for the dollar at 67.5228 and for the euro at 79.5824.