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Fund outflows, oil prices to sink rupee further; 75-mark in sight
By Rohit Vaid
Mumbai, Oct 7 (IANS) The Reserve Bank of India’s (RBI) stance, along with an expected hike in the US lending rates and high crude oil prices are expected to further exert pressure on the Indian rupee in the coming week, experts say.
In addition, the continuous outflow of foreign funds from the equity segment and global market volatility will likely push the rupee to the 75-mark to a US dollar in the coming days, the experts opined.
Conversely, RBI interventions in the spot market via intermediaries might somewhat arrest the sharp decline in the rupee’s value, but a range of 73.5-75 per US dollar is expected.
In the week gone by, the rupee touched a fresh low of over 74 to a US dollar in the spot market. It settled at a record closing low of 73.77 (73.7675) per US dollar on Friday, October 5.
“The RBI’s new policy stance, stress on the NBFC sector and expectations of more rate hikes by the US Fed are expected to weigh heavy on the Indian rupee,” Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, told IANS.
“Volatility is also expected to flare-up from the RBI’s side as it is expected to heavily intervene in the market to arrest any abrupt movements. The expected range for next week is 73.5-75 per USD (spot).”
The RBI on Friday belied market expectations of a rate hike. However, the “neutral” stance of monetary policy was changed to “calibrated tightening”, which triggered a massive sell-off in the equities market.
According to Madhavi Arora, Economist, FX and Rates, Edelweiss Securities, the RBI is of the view that it should let underlying trade competitiveness improve gradually as the trade-weighted exchange rate acts as a natural stabiliser.
“The RBI also subtly suggested that FX markets are fluid and should let rupee decide it’s own equilibrium. While the rupee comfortably crossed 74 on policy day, it did close sub-74, largely owing to FX interventions,” Arora told IANS.
“The coming weeks would see pressure on the rupee continuing as external and domestic conditions remain unfavourable for the currency. We do not rule out the rupee crossing 75 and would watch out for assertive policy actions by the government or RBI if the currency continues to remain an EM (emerging markets) outlier.”
Besides, high oil prices might not allow the rupee to make any substantial recovery. On Friday, Brent crude was priced over $84 per barrel.
“The rupee is expected to remain under pressure during the next week as the RBI monetary policy has disappointed the market,” said Anand Rathi Shares and Stock Brokers’ Research Analyst Rushabh Maru.
“Rising crude oil prices and the strength in the dollar index might keep the rupee under pressure. The short-term range is expected to be in the 73.20 to 74.80 band.”
Apart from global cues, any further outflow of foreign funds from the Indian equity and bond markets might have an adverse impact on the rupee.
In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors sold scrips worth Rs 9,522.44 crore during the week ended October 5.
On a weekly basis, the rupee closed at 73.77, weaker by Rs 1.29 from its previous week’s close of 72.48 per greenback.
(Rohit Vaid can be contacted at [email protected] )
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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