Rupee continues rally, opens 28 paise stronger at 80.52 against US Dollar

The domestic currency received a boost from US Federal Reserve's hint that intensity of rate hikes will be reduced.

FPJ Web Desk AgenciesUpdated: Monday, November 14, 2022, 11:29 AM IST
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Rupee gains 28 paise to 80.52 against US dollar in early trade on Monday | File

Buoyed by hopes of US Federal Reserve reducing the intensity of interest rate hikes, Rupee surged by 28 paise to open at 80.52 against the dollar. Before this the domestic currency had gained 62 paise to close at 80.78 on Friday. Despite US monetary policy tightening and the war in Ukraine, the Rupee has declined less against the dollar in comparison to other currencies. The US dollar is expected to weaken after the country's inflation reading turned out to be lower than expectations.

As the US Federal Reserve is expected to raise interest rates by 50 basis points, as opposed to 75 basis points previously, other Asian currencies were also in the green.

"Rupee may remain weak-to-volatile for a while, but we think the worst is largely over for the currency," Seshadri Sen, Head of Research at asset management company Alchemy Capital Management told ANI in his written response.

He added that, "The rupee has been largely stable against the DXY dollar index, indicating that the depreciation is largely in line with global currencies. This is remarkable, given the external account headwinds the economy faces."

Barring July and August when they were net buyers, foreign portfolio investors (FPIs) had been selling equities in the Indian markets for over a year, which started in October last year due to various reasons.

Fund inflows again seemed to have returned in November as data showed FPIs invested ₹ 18,979 crore in Indian equities.

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