The rupee has fallen to fresh record lows after a surge in global oil prices and on expectations that it could start hurting India’s import bill. The slide was triggered chiefly by July’s trade deficit that widened to $15.8 billion on the back of pricier oil.
Last week, volatility in the dollar was curbed, but a mixed set of economic numbers from the US kept the greenback under pressure. On the domestic front, market participants have been cautious and weakness in the rupee has raised expectations that the RBI this year could consider raising interest rates twice this year, once in October and another in December.
This week, inflation and industrial production numbers are taking focus. But importantly, investors are digesting the inflation print to firm up a view on the currency. As a whole, we expect the rupee to remain under pressure against the dollar. Read More
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