MUMBAI: The rupee dipped to a low of 84.09 in intraday trades before closing flat at 84.08 in the interbank forex market on Wednesday. The dollar strengthened against most international currencies as markets reduced expectations of a 50 basis point cut in interest rates by the US Federal Reserve.
Dealers also noted that the possibility of a Trump win is supporting the dollar, while the rupee faces ongoing pressure from sustained sales by foreign institutional investors.KN Dey, a forex consultant, said, “The volatility in currency markets will continue and may extend till Jan 2025, when the new US President takes over on Jan 20.” The Dollar Index has surpassed 104 amid speculation that last month’s 50 basis point rate cut was premature and thus, decreasing chances of higher US rate cuts.
Dealers said that the rupee had weakened to 84.19 in the non-deliverable forward market. However, RBI is ensuring that there is minimum volatility in the spot market selling dollars so that the rupee trades in a narrow range.
