What’s the story
The Indian Rupee experienced a significant drop on Monday, closing at its lowest level ever.
The rupee closed at 83.9725 against the US dollar, marking a slight decrease from its previous close of 83.9550 during the trading session.
This depreciation was influenced by a similar trend observed among other Asian currencies.
RBI intervenes as Asian currencies experience fall
In response to the rupee’s depreciation, the Reserve Bank of India (RBI) reportedly intervened by selling dollars.
This move was aimed at preventing further weakening of the rupee.
The intervention coincided with a decline in most Asian currencies, which fell between 0.1% and 0.8%.
Simultaneously, the dollar index experienced a slight decrease, settling at 103.1.
Market anticipates rupee’s performance ahead of US inflation data
Traders are closely monitoring the rupee’s performance as they await the release of US consumer inflation data on Wednesday.
This information is expected to impact predictions about when the Federal Reserve may start easing policy rates.
Interest rate futures are currently factoring in approximately 100 basis points (bps) worth of rate cuts over 2024, with cuts expected to commence in September.
