Indian Rupee Hits 91 Against US Dollar for the First Time in Intraday Trading

The Indian Rupee has crossed the 91 mark against the US Dollar for the first time in intraday trading, reaching an all-time low. However, the decline does not seem to be over yet. Market experts predict that the Rupee will continue to depreciate further against the Dollar. Neelkanth Mishra, Chief Economist at Axis Bank, stated that a further decline in the Rupee is expected, but there is no need to panic about the fluctuations in the domestic currency.

The Indian Rupee is at its historical lowest against the US Dollar. Mishra, who is also a part-time member of the Prime Minister's Economic Advisory Council, advised that the Reserve Bank of India (RBI) should avoid targeting a specific level for intervention. He mentioned that India’s foreign exchange reserves, which stand at around 685-690 billion dollars, provide a strong position, and hence, there is no immediate need for concern despite the Rupee’s depreciation against the Dollar.

Mishra added that the RBI’s strategy related to the ‘Forward Market’ is causing issues, and attempting to defend a particular level like 83 against the Dollar in the past was a mistake. The ‘Forward Market’ involves private parties agreeing to buy or sell an asset (such as currency, commodities, or securities) at a future date for a specific price. In this market, ‘Forward’ contracts are used to hedge against price volatility, as opposed to relying on centralized exchanges.

He explained that the impact of previous mistakes is still troubling, and the Rupee is expected to weaken further, with predictions that it could reach 92-94 per Dollar by June 2027. However, Mishra emphasized that there is no need to worry about the current depreciation of the Rupee.

On Tuesday, the Rupee crossed the 91 level against the US Dollar for the first time in history. However, by the end of trading, it closed 15 paise stronger at 90.93 per Dollar.