Rupee Tumbles 43 Paise to Close at 96.78 Against US Dollar Following RBI Policy Decision
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Rupee Weakens Despite RBI Rate Hike as Crude, Dollar Pressure Outweigh Policy Support
Get latest articles and stories on Business at LatestLY. The Indian rupee weakened sharply against the US dollar on Wednesday despite the Reserve Bank of India raising interest rates for the first time since February 2023, as elevated crude oil prices, higher global bond yields and importer demand outweighed the support normally expected from tighter monetary policy. Business News | Rupee Weakens Despite RBI Rate Hike as Crude, Dollar Pressure O…
Indian rupee FX premiums jump after RBI policy leaves traders bracing for more sell/buy swaps
On Wednesday, after the Reserve Bank of India's policy meeting, dollar-rupee forward premiums soared, marking the highest implied 1-year dollar/rupee forward premium seen in six months. With traders expecting more foreign exchange swaps as part of the RBI's liquidity management strategy, the spot USD/INR increased by 0.28%, edging closer to its historical peak. These shifts reveal the profound impact of the RBI's actions on the market.
Following the RBI policy rate hike, the rupee fell to its second-lowest level against the dollar, falling 43 paise. The RBI had previously raised the repo rate by 0.25 percent.
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