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The rupee appreciated sharply by about 39 paise on Thursday as the dollar weakened following the US Fed effecting a widely-expected quarter percentage point rate hike, while hinting at the possibility of a pause amid the recent banking sector turmoil.
The rupee closed at 82.2630 per dollar against the previous close of 82.6525.
The rupee opened about 28 paise stronger at 82.3750. Intraday, it hit a high and low of 82.08 and 82.4050, respectively.
IFA Global Research, in a report, said: “The rupee ended the session 0.47 per cent stronger…further strength can be expected in the coming weeks.
“The dollar index is marginally lower at 102.3 as FED commentary was slightly less hawkish on the back of the banking sector turmoil there. “
The rupee could not appreciate below 82.08 as oil marketing companies bought dollars, said a chief dealer with a private sector banks.
Moody’s Analytics, in a report, cautioned that a new bout of rupee weakness could force the Reserve Bank of India to press harder on the brakes, slowing what it expects to be one of EM (Emerging Market) Asia’s best performing economies.
Analysts with the firm observed that the risk of currency weakness in emerging Asia is especially worrisome given its status as the cradle of the EM recovery.
“Our outlook calls for economies in emerging Asia to handily outperform the rest of the EM cohort as China’s rebound gains momentum and as pent-up demand, still on hold from the Delta wave in India and Southeast Asia, props up consumer spending,” Moody’s Analytics said.
But further currency weakness could put the region’s central banks in a bind.
“Nowhere is this risk greater than in India, where a new bout of rupee weakness could force the Reserve Bank of India to press harder on the brakes, slowing what we expect to be one of EM Asia’s best performing economies,” the analysts’ said.
G-Sec yields
Meanwhile, yields of Government Securities ended flat, with the yield of the widely traded 10-year benchmark last being traded at 7.34 per cent.
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