Mumbai: The Indian rupee on Thursday rose from a 39-month low against the US dollar after the Reserve Bank of India intervened in the foreign exchange market, according to a Reuters report.
At 10.50am, the rupee was trading at 68.74 a dollar, down 0.23% from its previous close of 68.57. The rupee is now 10 paise short of its all-time low of 68.85 to the dollar. The home currency opened at 68.76 against the US dollar and touched a low of 68.84, a level last seen on 28 August 2013. So far this year, it has fallen 3.8%.
Earlier a Bloomberg report said quoting an official who did not want to be identified sadi that the fall in the rupee was in line with the global currencies and higher US bond yields. The RBI will take appropriate action to deal with the currency decline, the report said
On Wednesday, India Ratings Research Pvt. Ltd and Deutsche Bank had said in separate research reports that the RBI is likely to preserve forex reserves and utilise them judiciously, given the global risk aversion and greater probability of a US Federal Reserve hike.
The sharp strengthening of the dollar also kept emerging currencies under pressure. Ind-Ra believes this will keep the rupee trading with a weakening bias in the near term. Moreover, portfolio investment outflows from domestic bond markets and the weak equity market will deepen the pressure on the rupee
Most of the brokerages have also revised their year-end forecast for the currency. BNP Paribas estimates the currency will be at 68 a dollar till year-end against 66.5 a dollar of its projection. Deutsche Bank expects the currency to breach 70 by the year-end and 72.5 a year later. HSBC Global Research in a 16 November note said that it expects that rupee may weaken to 68 by end-2016 and 69.5 by end-2017.
