Indian rupee has breached the 52 mark

The Indian rupee has breached the 52 mark versus the dollar. Today, the rupee had opened at 51.9 per dollar. It is now currently trading at 52.16 per dollar.

The rupee did make an initial recovery to hit an intraday high of 51.53 against dollar showing signs of strength. However, the rally was short-lived and it surpassed the 52 mark versus dollar for the first time ever. The recovery in the early trade was in conjuction with Asian peers. However, a steep fall in equity markets in the late trade brought dollar buyers back in the market. Also, Non Deliverable Forward market turned into buying mode. The dealers say there are no dollar sellers in the market and the market is looking forward to RBI.

Pradeep Khanna, Director & Head – FX Trading, HSBC India feels that he is little surprised by the timing of the move on the rupee. He adds that emerging economies especially India where growth stories don’t look to be extremely exciting in the near future will face pressure on its domestic currency & one can see 53-54 levels going ahead.

Sharmila Whelan, Senior Economist, CLSA says that the downside risk for rupee has increased since all the bad fiscal news has come out. A huge rally in dollar across the board is seen as investor’s eye safety into the dollar. She expects rupee to touch 54 this month.