The Indian rupee has been facing significant pressure in recent times, prompting the country’s central bank to step up its defense of the currency in the offshore foreign exchange market. The rupee has been hovering near its record low against the US dollar, with some reports indicating that it has even plumbed new lows.
According to reports, the rupee rose by 2 paise to 88.75 against the US dollar in early trade, but this gain was short-lived as it ended lower amid negative cues from equities. The central bank’s defense of the rupee has been ongoing, with the bank selling dollars in the offshore market to prevent the rupee from depreciating further.
The rupee’s decline has been attributed to various factors, including a strong US dollar, rising crude oil prices, and a decline in investor sentiment. The Indian economy has also been facing challenges, including a slowdown in growth and a widening trade deficit.
Despite the central bank’s efforts to defend the rupee, the currency has continued to weaken, with some reports indicating that it has reached a new low of 88.80 against the US dollar. This has raised concerns about the impact of a weak rupee on the Indian economy, including higher import costs and inflation.
The central bank’s decision to step up its defense of the rupee in the offshore market is seen as a move to prevent the currency from depreciating further and to stabilize the foreign exchange market. The bank has been using various tools, including selling dollars and intervening in the forward market, to support the rupee.
Overall, the Indian rupee remains under pressure, and the central bank’s efforts to defend it are ongoing. The currency’s weakness has significant implications for the Indian economy, and the central bank’s actions will be closely watched in the coming days. With the rupee hovering near its record low, the central bank’s defense of the currency will be crucial in determining its future trajectory. The bank’s ability to stabilize the rupee and prevent further depreciation will be key to maintaining investor confidence and supporting the Indian economy.