The Crossbill News Desk
In August, the Indian rupee was the second-worst-performing currency in Asia, following the Bangladeshi taka, due to strong demand for the US dollar and outflows from domestic equities.
The rupee depreciated by 0.2 percent over the month. It was one of only two Asian currencies, along with the Bangladeshi taka, to experience a decline against the US dollar, Business Standard reported.
Sonal Badhan, an economist at Bank of Baroda told Business Standard, “The rupee depreciated by 0.2 per cent in August to currently trade at 83.87 per dollar, close to its lifetime low of 83.97 per dollar. This was despite the weakening of the US dollar. The factors that impacted the rupee are a slowdown in FPI inflows (mainly the equity segment), and increased dollar demand by importers. In contrast to most global currencies which rose against the dollar, the rupee declined.”
So far in the current financial year, the Indian rupee has depreciated by 0.6 percent. In the previous financial year (FY24), it was the third most stable Asian currency against the US dollar, following the Hong Kong dollar and the Singapore dollar. This stability was largely due to timely interventions by the Reserve Bank of India. During FY24, the rupee depreciated by 1.5 percent, a significant improvement from the 7.8 percent decline in FY23.
In the calendar year 2023, the rupee exhibited notable stability against the dollar, showing the least volatility it has experienced in nearly three decades. The local currency saw a marginal depreciation of 0.5 percent against the greenback. The last time the rupee demonstrated such stability was in 1994, when it appreciated by 0.4 percent, Business Standard reported.
Despite a weak US dollar, the rupee hit a record low in August 2024. Market participants now anticipate that the local currency will remain range-bound in the near term.
The rupee depreciated by 0.2 percent over the month. It was one of only two Asian currencies, along with the Bangladeshi taka, to experience a decline against the US dollar, Business Standard reported.
Sonal Badhan, an economist at Bank of Baroda told Business Standard, “The rupee depreciated by 0.2 per cent in August to currently trade at 83.87 per dollar, close to its lifetime low of 83.97 per dollar. This was despite the weakening of the US dollar. The factors that impacted the rupee are a slowdown in FPI inflows (mainly the equity segment), and increased dollar demand by importers. In contrast to most global currencies which rose against the dollar, the rupee declined.”
So far in the current financial year, the Indian rupee has depreciated by 0.6 percent. In the previous financial year (FY24), it was the third most stable Asian currency against the US dollar, following the Hong Kong dollar and the Singapore dollar. This stability was largely due to timely interventions by the Reserve Bank of India. During FY24, the rupee depreciated by 1.5 percent, a significant improvement from the 7.8 percent decline in FY23.
In the calendar year 2023, the rupee exhibited notable stability against the dollar, showing the least volatility it has experienced in nearly three decades. The local currency saw a marginal depreciation of 0.5 percent against the greenback. The last time the rupee demonstrated such stability was in 1994, when it appreciated by 0.4 percent, Business Standard reported.
Despite a weak US dollar, the rupee hit a record low in August 2024. Market participants now anticipate that the local currency will remain range-bound in the near term.
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