Looks like, the worst is not yet over for the
rupee. The currency may remain in a tight bearish grip as foreign money rushes out of equities and debt amid sticky oil prices.
On a year-to-date basis, the rupee has plunged more than 16 per cent to a record low of 74.48 against the
dollar.
Market participants are worried about unabated foreign capital outflows. Foreign institutional investors (FIIs) have offloaded shares worth a net of over Rs 14,000 crore so far in October.
“The rupee continues to make a new record low as global and domestic equities experienced a steep sell-off. Continued FII outflows from debt and equity market is keeping sentiment bearish. Though the
crude oil prices have eased overnight, it is temporary. As US sanctions on Iran begin from November, crude oil prices might continue to rise in the international market. This may pressure the rupee in coming sessions,” said Rushabh Maru, Research Analyst, Anand Rathi Shares and Stock Brokers. "The focus would now shift to India’s macroeconomic data that will give further direction to the rupee."
In the international market, Brent oil has rallied nearly 24 per cent so far in 2018. The black gold jumped to $82.33 per barrel on October 11, from $66.57 on January 2.
Madhavi Arora, economist, forex and rates, Edelweiss Securities, said, “We expect rupee weakness to persist, heading towards 75 plus levels against the dollar amid difficult global and domestic environment, unless some additional assertive policy steps come through. Even as we see a less probability of any unconventional policy measures amid comfortable forex war chest, we do not fully rule it out if the rupee remains volatile and becomes an emerging market outlier in the fragile forex space.”
Anindya Banerjee, currency analyst, Kotak Securities said, “Technically, dollar-rupee remains in an uptrend. If the pair manages to sustain above 72.90 on spot, above the last few weeks range of 71.50-72.90, it can aim at 74.50/75 on spot. Nevertheless, if the pair fails to sustain above 72.90, we can expect the old range of 72 and 73 to come into play.”