The Indian rupee fell as importers, particularly the nationâs refiners, increased the buying of the U.S. dollar to pay for increasingly costlier overseas purchases, utilizing the U.S. currencyâs strength.
The stronger rupee may attract trader by decreasing the cost of overseas shipments, but for now gains in the greenback has made U.S. currency more appealing for importers, who are looking for the ways to lower their expenditures as the prices for commodities, especially the crude oil, are rising worldwide. Banks are also purchasing the dollar to cover the short positions. Analysts expect the rupee to trade at 44.58 per dollar, compared with the previous estimate of 44.51.
The Indian currency’s previous appreciation was caused by the outlook that the expanding economy and the increasing interest rates will attract foreign funds. The country’s imports rose 66.4 percent in February compared to the previous year, while exports advanced 34.8 percent.
USD/INR trade at 44.41 as of 17:10 GMT up from the opening price 44.30. EUR/INR traded near 59.3749 by 17:15 GMT after opening at 59.4483.
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