Rupee's weakness continues as the local currency has hit a record low of 91.95 against the US Dollar. This comes against the backdrop of global turmoil, rapid FII selling and uncertainty around the India-US trade deal.
These are only a few of the many factors contributing to the rupee's weakness against the greenback. In light of this weakness, NDTV Profit spoke to Anindya Banerjee, Senior Vice President of Currency at Kotak Securities, who explained why the rupee has once again hit a new record low.
Banerjee stated that the sudden fall in equity markets on Friday has played a key role in putting pressure on rupee. "The Indian rupee is one of the weakest currencies in Asia. So wherever there is a sharp fall in the equities market, it paves the way for speculators to come in and short the rupee," he said.
Anindya added that the rupee situation should improve considerably once the Reserve Bank of India steps in.
NDTV Profit also spoke to Harshal Dasani, Business Head at INVAsset PMS, about the road ahead for the rupee. In response, Dasani stated that the rupee/USD could improve if there is more clarity on the India-US trade deal. But until that happens, the rupee is likely to trade in the 91-92 zone.
"Looking ahead, if trade-related clarity improves, USD/INR could retrace meaningfully. However, until that visibility emerges, the rupee is likely to trade with an upward bias and elevated volatility, with 91–92 acting more as a zone than a terminal point in the near term," he said.
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