The rupee depreciated by 14-15 paise to 84.90 per US dollar in the NDF market, traders said. The fall in the rupee is because traders expect changes in the central bank’s currency intervention policy. During Shaktikanta Das’ tenure, the RBI regularly intervened in the foreign exchange market to prevent excess volatility.
“Governor Das kept the rupee in a tight range, and the new governor may have a different approach when it comes to interventions in the foreign exchange market. Things may change even though the new governor also comes from a Ministry of Finance background,” said Anil Bhansali, head of treasury at Finrex Treasury Advisors.
The new governor, Sanjay Malhotra, will take charge on December 11.
In the on-shore market, the Indian rupee depreciated 5 paise and ended at 84.73 per US dollar on Monday, as depreciating bias continued for the rupee ahead of the Federal Open Market Committee meeting next week, analysts said.
The fall in the rupee to 84.90 was not expected and has built in expectations that the currency will cross the 85/$1 mark sooner, than later, according to analysts.”The level of 84.90/$1 was not expected, but it happened. I think it may be corrected when the on-shore market opens tomorrow as the RBI may intervene to bring the currency near Monday’s closing levels,” said KN Dey, currency risk manager at United Financial Consultants.”Opening of the on-shore market on Tuesday will likely be near 84.74/$1 to 84.75/$1 levels. But now it is clearer that the 85/$1 levels could be crossed this month itself,” said Bhansali.
