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Rupee Tumbles Past 95 Amidst Fed Fears
2 Jul
Summary
- Indian rupee fell below 95 per dollar for the first time in a month.
- US Federal Reserve chair's anticipated hawkish remarks fueled the decline.
- RBI intervened to curb losses, marking the rupee's sharpest fall since early June.
The Indian rupee significantly weakened, crossing the 95 per dollar mark for the first time in nearly a month. This notable depreciation occurred as traders braced for potentially hawkish remarks from US Federal Reserve chair Kevin Warsh. The dollar index also surpassed 101. The rupee concluded trading at 95.24 on Wednesday, marking a 58 paise drop from its previous close.
The Reserve Bank of India actively intervened as the rupee crossed the 95 level, helping to mitigate further declines. This represents the rupee's steepest fall recorded since early June. Analysts suggest that the rupee trading weaker than 94.80 levels indicates a new trading range is forming, potentially between 95.00 and 95.50 for Thursday.
Previously, the currency had maintained a trading range between 94.20 and 94.65 per dollar for approximately a month. Experts noted that the RBI's selling of dollars around 94.75 and 95 levels aimed to prevent excessive weakness, particularly with expected inflows from FCNR deposits and European Central Bank loans.
