Indian rupee is expected to depreciate on Thursday on account of stronger dollar and selloff in global markets. The domestic currency appreciated by 25 paise against the US dollar on Wednesday due to a pullback in the greenback and crude oil prices after Western countries imposed several sanctions on Russia for sending troops into separatist-held regions of Ukraine. At the interbank forex market, the local unit opened at 74.64 against the Amercian currency and witnessed an intra-day high of 74.54 and a low of 74.73 before finally settling at 74.59, up 25 paise over its previous close.
Rupee to depreciate on dollar, selloff in global markets: ICICI Direct
“The dollar index edged higher by 0.19% on Wednesday as Ukraine declared a state of emergency and raised concerns about escalating tensions with Russia. Further, pessimistic sentiments in global markets and uptick in US treasury yields continued to support the dollar. Rupee February futures appreciated by 0.21% due to retreat in crude oil prices. However, risk aversion in the domestic markets weighed on rupee. The rupee is expected to depreciate today due to stronger dollar and selloff in global markets. However, expectations of FII fund inflows for upcoming LIC’s IPO may prevent further decline in the rupee. Meanwhile, investors will remain cautious ahead of GDP data from US. US$INR (March) is likely to rise towards 75.30.”
Kshitij Purohit, Lead Commodity & Currency at CapitalVia Global Research
“The rise in INR future premiums following the Reserve Bank of India’s (RBI) swap announcement aided USD/INR sellers. On Monday, the RBI said that on March 8, it will enter into $5 billion in sell-buy swaps with banks to prolong the maturity profile of its forward dollar book. As tensions between Russia and Ukraine continue to dominate attitudes across global markets, the SPOT USDINR pair has seen tumultuous sessions. If the current situation worsens, the USDINR pair will climb towards 75.25, with goals of 75.72 opening up above that. We predict the market to absorb news flows in a range of 75.25-74.40 till then.”
Gaurang Somaiya , Forex & Bullion Analyst, Motilal Oswal Financial Services.
“Rupee rose marginally after remaining under pressure in the past few sessions following increased uncertainty between Russia and Ukraine. Yesterday, Western nations punished Russia with new sanctions for ordering troops into separatist regions of eastern Ukraine and threatened to go further if Moscow launched an all-out invasion of its neighbour. Dollar gained in the overnight session as Ukraine declared a state of emergency amid intensifying fears of a full-scale Russian invasion.”
“Ukraine declared a state of emergency and told its citizens to flee Russia, while Moscow began evacuating its Kyiv embassy. A senior U.S. official said that Russia is as ready as it can be to launch what could be a full-scale invasion, with 80 percent of troops assembled around Ukraine in attack positions. Today, focus will also be on the important preliminary GDP number that will be released from the US. Better-than-expected economic data could extend gains for the dollar. We expect the USDINR(Spot) to trade sideways and quote in the range of 74.40 and 75.20.”
