In the previous sessions, the local currency was closed at 83.455. The Indian Rupee fell onto 83.620 against the US Dollar on Thursday. Vodafone’s stake sale has been said among the triggers for the INR slide.
Reason for the slide:
The Indian stock markets also achieved a milestone, executing 5 major deals worth Rs. 23000 crore. This has been the highest in a single day. Anil Kumar Bhansali, executive director and the Head of Treasury of Finrex Treasury Advisors LLP mentioned that the outflow of $2 billion was the result of the block deals. Indus towers can also be a reason behind the Indian Rupee hitting the lowest records. He even mentioned that FPIs (Foreign Portfolio Investors) and the oil industries are big buyers of the US Dollar. This is the reason for the high demand of the US Dollar which led to geopolitical tensions. This high demand of US Dollar has made a shortage of demand in the Indian Rupee.
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The RBI is constantly being instructing and intervening the state-banks to limit the depreciation of Indian Rupee. Such offers were low and absent on Thursday, which led to the Indian Rupee setting the record low.
The US Dollar has indexed and strengthened against most of the Asian Currencies. Chinese Yuan also hits its lowest since November 2023. Outflow of the foreign capital like US Dollar from domestic as well as corporate demands have been the reason for pressuring the local currencies like Indian Rupee to trade the lowest records, despite of the growth seen in the Indian Economy.
Impact on the Indian Rupee:
The INR is still the best performing currency in Asia. The Hong Kong Dollar still exceeds Indian currency. This indicated its relative resilience against the currency fluctuations. The Indian stock markets like Nifty 50, Sensex have traded higher which are then followed by banks and metal stocks. The Indian Rupee’s decline on Thursday led to changes in other currencies value as well. The Chinese Yuan went down at 0.1% which is its weakest since November 2023.
