![]() "With FX reserves slowly being run down and dollar strength causing the rupee to go past 80.00/$, FX reserves will be used as "sand in the wheels" to slow the pace of exchange rate movements, rather than protecting any levels," said Sajjid Chinoy, chief India economist at J.P. The RBI has already spent nearly $100 billion of its previous $642 billion pot of dollar reserves and was expected to deplete it to $523 billion by end-2022 to prop up the rupee, a separate Reuters poll showed. Just over 10% of economists suggested central banks should continue selling their dollar reserves. Slightly under one-third said there was nothing that could be done. None predicted that in a September poll.Īsked what was the best approach to strengthen emerging market currencies against the dollar over the coming six months, around 40% analysts, 18 of 45, said central banks needed to hike interest rates more aggressively. ![]() That lines up with expectations in a wider poll for the dollar's dominance to continue beyond 2022.Īlthough the median consensus showed a marginal recovery in six months, about 25% of strategists, 10 of 39, forecast the partially-convertible rupee to touch 82.5/$ and beyond. The rupee was then expected to recover just about 0.7% to trade around 81.30/$ in 6 months and 80.50/$ in 12 months, still not far from its record low. 3-6 Reuters poll of 40 FX analysts which showed the three month median forecast for the currency at 82.00/$, near where it was trading on Thursday.īut the median view of 19 analysts who answered a separate question showed the rupee would fall as low as 83.00/$ before year-end. That downward trend is unlikely to reverse anytime soon, according to the Oct. While it found brief respite after the RBI delivered its fourth consecutive interest rate hike last week, a widening trade deficit driven by rising oil prices and a slowdown in exports have dragged the rupee down. Steamrolled by the Fed-pumped dollar, the rupee has fallen over 10% this year and reached an all time low of 82.22/$ on Thursday, even though the Reserve Bank of India continues to sell its forex reserves to defend the local currency. Federal Reserve rate-hiking campaign, according to a Reuters poll of FX strategists. FX Publications Inc is a subsidiary of IG US Holdings, Inc (a company registered in Delaware under number 4456365).BENGALURU, Oct 7 (Reuters) - India's rupee will trade near its record low against the mighty greenback beyond this year, buffeted by rising oil prices and an aggressive U.S. Registered Address: 251 Little Falls Drive, Wilmington, DE 19808. FXP is not responsible for any trading decisions taken by persons not intended to view this material. Any examples given are provided for illustrative purposes only and no representation is being made that any person will, or is likely to, achieve profits or losses similar to those examples. It is not a solicitation or a recommendation to trade derivatives contracts or securities and should not be construed or interpreted as financial advice. This information is made available for informational purposes only. Information presented by FXP should be construed as market commentary, merely observing economical, political and market conditions. residents or individuals domiciled in the U.S. Any and all information provided by FXP is not intended for use by U.S. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.įX Publications Inc., abbreviated herein as FXP, (d.b.a DailyFX) is no longer a registered Introducing Broker with the Commodity Futures Trading Commission and is no longer a Member of the National Futures Association in the U.S. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors.
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