December 12, 2024
New Delhi, India
USDINR Today
Rupee (INR) extended its losses on Friday, hovering near fresh record lows, as both global and domestic factors weighed on sentiment.
- Global Factors Driving INR Weakness:
- The US Dollar (USD) strengthened amid renewed tariff threats from former President Trump.
- Asian currencies came under pressure due to a weaker offshore Chinese Yuan (CNH), following comments by a senior adviser to the US President-elect, warning China against currency manipulation.
Domestic Developments Add to Pressure
Domestically, the appointment of bureaucrat Sanjay Malhotra as the next Reserve Bank of India (RBI) Governor has fueled speculation over potential interest rate cuts, which could further weaken the INR.
- Inflation Moderation:
- Retail inflation eased to 5.48% in November, down from October’s 14-month high of 6.21%, driven by slower food price growth.
- This has led to increased market expectations of an interest rate cut in the RBI’s February policy review.
- Stock Market Impact:
- Indian benchmark indices opened lower on Friday, reflecting overnight declines on Wall Street.
RBI Interventions Provide Some Relief
The downside for the INR may be capped by active foreign exchange interventions by the RBI, which often sells USD to prevent sharp rupee depreciation.
Outlook
With traders awaiting RBI’s USD reserves data release, the Indian Rupee is expected to remain under pressure. As global uncertainties persist and domestic policy developments unfold, the currency’s trajectory will likely depend on coordinated fiscal and monetary actions.
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