Sumana Das, Pune
For the first time since October 2022, the value of the Indian Rupee declined below 83 per US Dollar on Aug.14. Earlier on October 2022, the currency dropped to 83. On the morning of Aug.14, at around 09:10 AM IST, the currency value hit around 83.06. At 09:32 AM it hit 82.9650 dropping down 0.25 % of 82.8450, marking the lowest slip down since October 20, 2022.
According to the experts, the impact is more evident because of the recent fall of the other neighbouring Asian currencies, namely the Philippines Peso at 1.1 %, the Indonesian Rupiah at 0.76 %, the South Korean Won at 0.74 %, the Malaysian Ringgit at 0.53 %, the Taiwan Dollar 0.46 %, China’s Yuan 0.29 %, the Thai Baht 0.27 %, and the Singapore dollar was down 0.24 % in the rise of US Yields.
On Aug.11, The 10-year U.S. yields shot up with the figures of 8 bps (Basis Points) and were performing relatively higher in Asia. With the soaring statistics in the US yields, the UK and Germany also witnessed a surge in Longer Maturity Yields.
While the University of Michigan came up with the survey where they predicted the lower-than-expected increase level in US inflation figures, surely this rise was unexpected. It also bolstered the Dollar position along with the well-performed PPI (Producer Price Index). The Dollar index is responsible for measuring US currencies’ strength against the major currencies. The value traded at 103.2, a 0.17% surge from the previous close of 102.84. While in the case of the US Dollar, it can be a breath of fresh air in the middle of inflation, for the Asian currencies, it is a significant dropdown with the addition of the wobbling Chinese economy reported in the previous week. As per the reports by Reuters, the Chinese Yuan dropped to 7.2775 to the US dollar.
At the international level, the currencies and the equities’ value is tumbling with the increase in the crude oil prices of around the $87 barrel limit which is another hit when it comes to global.
The head of treasury from the FX Advisory Firm from Finrex Treasury Advisory, Anil Bhansali is anticipating the participation of the RBI (Reserve Bank of India) in this matter which can help the currencies’ position go from 82.90 to 83.25. However, the traders from the market wanted to see the intervention when the currency dipped lower. According to one trader surely, RBI is there but there was some possibility that the organisation would have intervened in the situation.