Today, the rupee declined to 80.06 per dollar. The currency has been pushed against by approximately $30 billion of foreign outflows from the country’s equities so far in 2022. A record sum and concerns over a deteriorating current account deficit amid elevated oil and commodity prices.
Dheeraj Nim, who is the economist and FX strategist at Australia & New Zealand Banking Group Ltd said, “The risks for the rupee remain to decline further. Oil prices, particularly remain a bit volatile, while external headwinds due to Fed tightening may progress. The trade imbalance also remains wide.”
The Central Bank of India is for an orderly appreciation or depreciation in the currency and is intervening in all market compositions to avoid volatility, said the governor Shaktikanta Das. Strategists at Nomura Holdings Inc and Morgan Stanley progress to remain bearish on the ruee, predicting the currency may decline to 82 to a dollar by September this year.
The RBI has foreign exchange reserves of almost $600 billion, which it has been deploying to secure the rupee. Officials have raised duties on gold import and raised levies on petroleum exports.