Let’s check the foreign international market. On Monday, the central bank called an impromptu press conference. Thus, it fueled the expectations of a rate cut. The local central bank announced liquidity measures via long-term repo operations to dollar swap. It aimed at injecting rupee and dollar liquidity.
Abhishek Goenka is the CEO at IFA Global in a Mumbai-based consultancy firm. He said that they had asked all their importer clients to hedge fully. It was after the rupee hit a new record low through options and forwards. Through sell-buy swaps, which are leading to spike premiums, RBI provides dollar.
The rupee lost more than 5 percent to the dollar, this calendar year. Thus, it is ranking as one of the worst-performing currencies. On March 13, the rupee first hit a record low at 74.50 a dollar. Last Thursday, hitting a newer low at 75.31, it later extended its losses.
Goenka said that unhedged importer seeks to cover. Now they must shell out more money both in forwards and spot move.
To pump in dollar liquidity, RBI has already conducted two dollar-swap auctions. While selling it in the individual swap windows, the central bank buys dollars typically in forwards. The investors of the foreign portfolio have sold a record net of 95,485 crores in local securities in March, and it is highest ever.
Kumar Katke is a business Head of Commodity and Currency, in Axis securities. He said that the depreciating rupee is a double-edged sword.
He adds that importers will end up paying a higher price for services/goods purchased. Katke continues that exporters will end up receiving discounted credit.
In Indian equities and other financial assets, the rupee was over the edge with savage selling. Because of payments, it sent importers into a hurry to buy expensive foreign currency covers unhedged liabilities. Thus, on Monday, the rupee fell from a cliff.
It is the leading news of the market.
Key Points: AUD/JPY broke below a rising wedge, signalling possible bearish momentum, with immediate resistance at 103.00 and support at…
Key Points EUR/JPY Rises to 168.25: Strengthened by robust Eurozone economy and steady ECB policy. Eurozone GDP Grew by 0.3%…
Key Points: Nio's shares hit 44.20 HKD, up 20%, with electric vehicle deliveries up 134.6% year-on-year to 15,620. BYD leads…
Key Points: Ethereum fell sharply from $3,355 to a low of $2,813, reflecting high volatility and sensitivity to market dynamics.…
Key Points Nikkei 225 slightly fell by 0.1%, while the Hang Seng index surged by 2.4%. USD/JPY increased slightly, highlighting…
Key Points: Gold prices rose on MCX India to ₹71,278/10 gm and COMEX US to $2,328/oz. The US Dollar Index…
This website uses cookies.