The Indian rupee declined against the U.S. dollar today showing the second bearish day as the countrys parliament elections arent easily predictable about the actual winner that will form the new government.
While Indias currency was the definite beneficiary of the recent uprise of the high-yielding assets it suffers greatly now from the double impact of the heightened global risk-aversion and the ongoing national elections. The rupee traded at as low as 50 per dollar level today for the first time in 2 months as the traders thought that the winning party will have to create a broad coalition with smaller parties in order to form a government. According to the latest news the current ruling coalition led by the Indian National Congress may make it not much better than opposition lead by the Bharatiya Janata Party.
The analysts believe that the elections add a layer of uncertainty to an already risky and hard-to-predict Indian market. The fundamental statistics from India suggest bad time for domestic companies and thus it has nothing bullish for the currency. We may see the continuation of the rupees weakening during the next few weeks.
USD/INR went up from 49.60 to 49.79 as of 9:22 GMT today. It was reaching as high as 50.06 during the Asian trading session.
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