Indian rupee ended lower against the US dollar on Thursday, on increased demand for the greenback from importers and bank. Sentiments were fragile as India’s merchandise trade deficit rose to a fresh record high of $23.2 billion in November on account of falling exports and sticky imports. Traders were also worried with Moody’s Investors Service’s statement that the economic impact of the Omicron variant of COVID-19 on emerging economies will depend on a mix of government restrictions, public comfort with social interactions, and capacity of governments and central banks to provide additional policy support to the private sector. Meanwhile, Reserve Bank of India (RBI) stated that the combined debt-to-GDP ratio of states is expected to remain at 31 per cent by end-March 2022 which is worryingly higher than the target of 20 per cent to be achieved by 2022-23. On the global front, Foreign-exchange market volatility hovered near a nine-month peak on Thursday as traders weighed the risks posed by a more hawkish Federal Reserve amid ongoing uncertainty about the threat from Omicron.
Finally, the rupee ended 75.03 (Provisional), weaker by 12 paise from its previous close of 74.91 on Wednesday. The currency touched a high and low of 75.07 and 74.90 respectively.
