The Indian rupee has distinguished itself as one of the most stable currencies globally, maintaining strong stability against the US dollar, according to Reserve Bank of India (RBI) Governor Shaktikanta Das.
Das highlighted that the RBI’s policy aims to curb excessive volatility in the rupee, ensuring its stability fosters confidence among market participants, investors, and the broader economy.
Das remarked, “Stable rupee fosters confidence among market participants, investors and the wider economy.”
The RBI has been proactive in managing rupee fluctuations by intervening in the foreign exchange market, primarily utilizing public sector banks (PSUs) to sell US dollars as a means of stabilizing the currency.
This intervention includes liquidity management strategies, aimed at mitigating sharp depreciations in the rupee’s value.
A recent report from global investment firm Jefferies underscores the rupee’s position as the most stable currency among major economies.
Meanwhile, analysts attribute the rupee’s stability to the relative weakness of the dollar, which has led to only modest declines in the rupee’s value against it.
Markets are focusing on the US Federal Reserve’s upcoming policy meeting, likely scheduled for 16 September.
Analysts, including Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities however anticipate a 0.25% rate cut and a dovish stance from the Fed.
The likelihood of an interest rate cut has been bolstered by recent jobless claims, which rose to 230,000, exceeding the expected 228,000, thus providing the Fed with more leeway to ease rates.
On Tuesday, the rupee showed slight appreciation, gaining 2 paise to trade at 83.84 against the US dollar in early trading.
Market experts suggest that while the USD/INR pair might experience some volatility, support is between 83.80 and 83.70, with resistance levels noted at 84.05 and 84.15.
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