Thursday 26 / December / 2024
Muscat: The Indian Rupee plummeted to an all time low against the US dollar and closed at INR 84.8525 for the first time in the history.
Yesterday, after the normal market hours, the Non Deliverable Forward Market (NDF) touched 85 levels. The exchange houses in Oman are offering INR 220 for one Omani rial.
Speaking to Times of Oman, Madhusoodanan, Executive Advisor to the Board of Global Money Exchange said, “The reasons attributed to the fall are mainly domestic rather than global. Fresh foreign fund outflows, dollar demand from banks, expectations of a shift in the monetary policy, a possible rate cut, and signs of slowing down of Indian economy.” The appointment of Sanjay Malhotra , the Revenue Secretary, in place of the existing Governor Shaktikanta Das has fuelled expectations of a shift in the accommodative monetary policy of the Reserve Bank of India. The INR against 1 USD was INR82.86 during the 2nd week of January 2024. Now, it has crossed 84.85. The Reserve Bank of India has been continuously intervening in the forex market to keep the rupee depreciation marginal. The forex reserves of the country that was over $704.9 billion in September end has declined to $657 billion as on November 22, 2024. On the global front, the strong dollar index (106.14), tensions in the Middle East and recently with Syria, the signals of large scale policy changes by the Chinese government to support the economy are other related issues.”
He also said, “For the Indian government, the GDP data of 5.4% recorded in September 2024 quarter end is not at all satisfactory as it is below the RBIs expectation of 7%, mainly due to industrial slowdown. The lower than expected data has raised concerns among the investor community as well. Therefore, Sanjay Malhotra, new Governor is going to face the challenge of balancing exercise of growth and inflation. Keeping the INR volatility to marginal is also a tough task ahead though no magic stick is available to him,” Madhusoodanan said.
