The rupee more than doubled to a record low of 84.87 against the US dollar in early trade on Wednesday, amid growing expectations of a change in the Reserve Bank’s monetary policy following the appointment of Sanjay Malhotra as the new RBI governor.
Forex dealers say markets are now expecting a rate cut in monetary policy coming in February. While the muted tone in the domestic market and the overall strength of the US dollar index weighed heavily on the rupee.
In interbank foreign exchange, the rupee opened at 84.87, its all-time low against the greenback, recording a fall of 2 paise over its previous close.
On Tuesday, the rupee remained all day on a lower note higher by one paisa at 84.85 against the US dollar.
The Indian rupee opened higher after the market expected that the new RBI Governor will challenge his decision from the Finance Ministry and may reduce rates in February 2025, said Anil Kumar Bhansali, Head of Treasury and Managing Director, Finrex. Treasury Advisors LLP.
The government on Monday appointed Finance Secretary Sanjay Malhotra as the 26th Governor of the Reserve Bank of India.
Malhotra is cautious at a time when the Indian economy is facing the twin challenges of slowing growth and high inflation.
Although Shaktikanta Das has kept interest rates unchanged for nearly two years in an effort to control inflation, the incoming governor is said to be a party player who believes that rates cannot be managed by the Reserve Bank of India (RBI) alone and that the job requires the government. help me again.
The rupee was protected by the RBI at 84.86 but opened lower and is expected to be in the range of 84.77 to 84.97 during the day, Bhansali said.
The dollar index, which measures the greenback’s strength against a basket of six currencies, was trading down 0.07 percent at 106.32.
Brent crude, the global oil benchmark, rose 0.57 percent to USD 72.61 per barrel in futures trading.
Ahead of the domestic equity market, the benchmark 30-share index Sensex was trading 39.22 points lower, or 0.05 percent lower, at 81,470.83 points. The Nifty fell 5.15 points, or 0.02 percent, to 24,604.90 points.
Foreign Institutional Investors (FIIs) were the biggest buyers in the capital markets on Tuesday, as they bought shares worth Rs 1,285.96 crore, according to exchange data.
