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| Now News Network || 3rd October 2018 || NDTV Report |
The rupee plunged to all-time low of 73.42
against US dollar in morning trade on Wednesday, reported Press Trust of India
(PTI). Sharp rise in global crude oil prices over the last two sessions weighed
on sentiment for the local unit. Strong demand for the American currency from
importers and unabated capital outflows also affected the domestic currency,
said analysts. At the forex market, the rupee opened lower at 73.26 and
weakened further to quote at 73.42 a dollar against its Monday's closing of
72.91. Forex markets were closed on Tuesday on account of Gandhi Jayanti.
Here are 10 things to know about rupee:
1. The benchmark 10-year bond yield was up 6
basis points at 8.05 per cent on Wednesday.
2. Higher crude prices would continue to weigh
on domestic bonds and the rupee. The crude prices are likely to prevail over
liquidity easing measures announced by the RBI. The next domestic trigger would
be the tone of the RBI policy on Friday, forex advisory firm IFA Global said in
a note.
3. "Sharp rise in the crude oil prices
along with steep depreciation in the rupee might push inflation higher in
coming months. Sharp volatility in the domestic equities and steep FIIs
outflows from equity and debt segments are keeping sentiments bearish for the
rupee", Rushabh Maru, research analyst at Anand Rathi Shares and Stock
Brokers told NDTV.
4. Globally, oil prices firmed on expectations
of a tighter market once US sanctions start targeting Iran's petroleum industry
from next month, although a strong dollar and rising US crude supply curbed
gains. Brent crude oil futures were near $85 per barrel on Wednesday.
5. Brent and WTI (West Texas Intermediate)
earlier this week both reached levels last seen in November 2014, and the two
contracts have risen by around 20 and 17 per cent respectively since
mid-August.
6. The Reserve Bank of India (RBI) is likely
to increase the repo rate in the upcoming monetary policy review. "Focus
would now shift to the RBI monetary policy meeting. There is a buzz of repo
rate hike by 25 bps and possible change in the monetary policy stance by the
RBI. More importantly, its guidance will be crucial. Market will also keenly
watch whether the RBI announces any crucial measures to stabilize the rupee. In
the near term, the rupee might trade in 72.50 and 73.80 range", added Mr
Maru.
7. The Reserve Bank of India (RBI) on Monday
said that it would pump Rs. 36,000 crore into money markets in October,
pledging to buy back government bonds as part of a bid to quell fears of a
credit crunch cascading through the economy.
8. The Indian rupee is down more than 12 per
cent in 2018. There are predictions that crude could return to $100 per barrel.
Hence, signalling that things may get a lot worse for the rupee in the final
three months of the year, said a Bloomberg report.
9. In 2013, the currency had rallied in the
October-December period following a two-quarter plunge of more than 13 per cent
on indications the Federal Reserve would wind back stimulus.
10. Foreign institutional investors (FIIs)
sold shares net worth a net of Rs. 1,842 crore on Monday, provisional data
showed.
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