MUMBAI: The Indian rupee is tipped to extend its recent slide versus the dollar on Monday after the US jobs report cemented bets of more large Federal Reserve rate hikes.
The rupee is expected at around a lifetime low of 82.70 per US dollar, down from 82.32 from the previous session.
The local unit has repeatedly posted record lows in recent sessions on concerns over oil prices, rising Treasury yields, corporate outflows and offshore demand for the US currency.
The Reserve Bank of India’s interventions have not been able to arrest the slide in the rupee, unlike in prior occasions.
“The double whammy of higher US rates and higher crude prices is back to haunt the rupee,” said IFA Global Research Academy.
“While the RBI was able to defend the rupee successfully through the last round of simultaneous stress on current and capital account by spending it’s reserves, this time around things are likely to be different.”
The RBI has less foreign exchange reserves at its disposal presently to protect the rupee. In the week through Sept. 30, India’s forex reserves declined to $532.66 billion, the lowest since July 2020.
Reserves were at $537.5 billion the week prior.
Indian rupee rises as traders await RBI policy decision
Treasury yields and the dollar index rose on Friday and US equities plunged following the US jobs data that was considered robust enough to keep the Fed on its path to deliver one more 75 basis points rate hike next month.
The 2-year US yield reached 4.35% in Asia trading, within a whisker of its recent highs.
Asian equities were down up to 2.5% and currencies were broadly lower.
Futures on the S&P 500 Index dipped after the gauge lost 3% on Friday.
Oil prices eased on Monday, after having extended their rally with a near 4% jump on Friday to five-week highs. An OPEC+ decision to make its largest supply cut since 2020, despite concern about a possible recession and rising interest rates, have boosted crude prices.
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