Rupee Falls 12 Paise To 82.88 Per Dollar On Global Economic Growth Worries

Rupee Today: After falling early in the session, the rupee held its ground on Friday

The rupee held steady on Friday after falling in early trade following a deep sell-off in the previous session, even as the threat of higher for longer interest rates prevails amid growing global recession concerns.

Bloomberg showed the rupee was last changing hands at 82.8750 per dollar, compared to its previous close of 82.7625 on Thursday.

PTI reported that the domestic currency dropped 9 paise to provisionally close at 82.85 against the US dollar. 

However, receding crude oil prices capped the rupee’s loss, forex traders told PTI.

Traders were also accurately hesitant to bet on the rupee falling below 83 per dollar in anticipation of an intervention from the Reserve Bank of India (RBI).

“The rupee opened at 82.85 per dollar and remained in a small range of 82.75 to 82.88. Supplies were low while oil continued to buy dollars; the RBI supplied $ at 82.85 to calm the market,” said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.

“The trading range for next week is likely to be 82 to 83.50 per dollar, with risks tilted against the domestic currency as we head into the holiday season when inflows will be lower, and dollar buying continues,” he added.

The US Federal Reserve, the European Central Bank, and the Bank of England all issued warnings of upcoming rate hikes, despite the possibility of an impending recession, which negatively impacted investor sentiment toward risk assets.

Investors are concerned about longer-term growth due to the likelihood of rising near-term rates since there are increasing indications that a global downturn is intensifying.

The dollar, though, has had a turbulent week, putting it on course to lose by 0.5 per cent overall.

Ten-year Treasuries rallied a bit on Thursday before steadying in Asia. Still, currency movements were more significant on Friday, with the dollar’s recent decline stopped by its largest increase in two months.

“This time it wasn’t US bond yields driving the move; instead it was just a feeling that if Fed policy remains tighter for longer…it could be tough going for risk assets,” Strategists at ANZ bank noted.

“The Fed may not be hiking as fast, but it still has the highest policy rate in the G10 and will be one of the few central banks to take policy (rates) past 5 per cent.”