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Indian rupee weakens on dollar’s rise overseas

25 Aug 2022 Evaluate

Indian rupee weakened against dollar on Thursday, due to fresh demand for American currency from banks and importers. Traders remained cautious with report stating that India’s business and consumption activity showed conflicting signs of recovery in July as elevated inflation, rising borrowing costs and fears of a global slowdown weighed on Asia’s third-largest economy. However, losses remain capped as some support came with RBI Monetary Policy Committee (MPC) Member Ashima Goyal stating that eight years of systemic economic reforms under the Modi government have increased India's macroeconomic stability and its capacity to withstand any external shocks. She further said appropriate countercyclical macroeconomic policy with continuing supply-side improvements has enabled a growth recovery that is among the best in the world. On the global front, sterling recouped some losses against the dollar on Thursday but was still languishing near a 2-1/2 year low ahead of upcoming speeches by Bank of England and Federal Reserve officials that could determine the near term outlook for the currency.

Finally, the rupee ended at 79.92 (Provisional), weaker by 6 paisa from its previous close of 79.86 on Wednesday. The currency touched a high and low of 79.93 and 79.80 respectively.

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