Rupee Fall News Today

A depreciating INR (against the USD) has several implications, rising domestic inflation being the most worrying 

There is a shortage of foreign exchange with India’s major export destinations, including Latin America and Africa.

Foreign portfolio investors, having splurged on government bonds ahead of Indias inclusion in global indices, offloaded ₹3,966 crore (around $450 million to $475 million) worth of sovereign debt in a single day when the rupee weakened past successive technical levels amid a retreating Chinese yuan and lack of significant market interventions by the Reserve Bank of India.

In the domestic equity market, the 30-share BSE Sensex was trading 20.84 points or 0.03 per cent lower at 69,530.19 points. The broader NSE Nifty inched up 5.15 points or 0.02 per cent at 20,911.55 points.

A weak currency does not necessarily mean a weaker economy. In fact, a weak rupee supported by good quality products, can actually boost exports despite global slowdown and attract investments into India 

On the domestic equity market front, Sensex rose 92.47 points or 0.14 per cent to settle at 66,023.24 points. The Nifty advanced 28.45 points or 0.14 per cent to 19,811.85 points.

At the interbank foreign exchange market, the rupee opened lower at 83.18 against the US currency. It moved in a tight range in morning deals.

The recent drop in the value of the Indian rupee might not cause a big change in inflation rate unless the currency falls even more, according to experts. Economists say that the Indian currency would need to drop significantly more than it already has against the dollar for it to affect inflation.

The US dollar index, which measures the greenback against six major global currencies, shot up on Thursday after data showed a higher-than-expected rise in headline inflation in the worlds largest economy. The data strengthens the possibility of the Federal Reserve raising interest rates again. Higher US interest rates lead to a stronger dollar, exerting downward pressure on emerging market currencies like the rupee.

The rupee closed at 83.2675 against the U.S. dollar, compared with 83.1850 in the previous session. The local unit weakened beyond its previous record closing of 83.2175 hit earlier this month