Indian Rupee Hits Record Low Against UAE Dirham
According to traders, the Indian rupee experienced a significant decline against both the US dollar and the UAE dirham on Friday, reaching its lowest level on record.
This depreciation was attributed to widespread weakness observed in other Asian currencies and heightened demand for the US dollar within the local market.
The rupee depreciated to an intra-day low of 22.732 against the UAE dirham before experiencing a slight rebound to close marginally higher at 22.7316. However, despite this minor recovery, the currency remained down by 0.3 percent for the day.
Traders noted that the rupee's descent to a historic low was primarily driven by robust bids for the US dollar towards the end of the trading session. Additionally, they highlighted the unexpected absence of intervention by the Reserve Bank of India (RBI) as a contributing factor to the currency's decline. A foreign exchange trader at a private bank remarked that the RBI's intervention, which typically occurs around the 83.38–83.39 levels, was notably absent during the session.
It is speculated that the RBI had engaged in selling dollars earlier in the session to alleviate pressure on the rupee. However, the absence of such intervention during critical junctures of the trading day exacerbated the currency's decline. Traders observed a combination of factors, including market dynamics and the central bank's actions, influencing the rupee's performance against major currencies.
Moreover, the Indian rupee's descent to a historic low against the US dollar and the UAE dirham underscores the challenges posed by external factors and local market dynamics. Traders continue to monitor developments closely, anticipating potential interventions by the RBI and fluctuations in currency markets in the coming sessions.
