Strengthening US dollar, bond yields pull rupee lower

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Mumbai– A strengthening US dollar as well as rising bond yields depreciated the Indian rupee to a month’s low level on Tuesday.

The rupee closed at 73.38 per dollar, down from 72.51 on Friday.

The broad strength in the dollar has hit almost all emerging market currencies, while the India rupee looks to be hit the most, as confluence of internal factors exaggerated the extreme move in the Indian currency, said Madhavi Arora, Lead Economist, Emkay Global.

She added that in all likelihood, the rupee will start following suit of its emerging market peers by early April.

“We anyway believe policymakers are getting more tolerant about the idea of a structurally weaker rupee in the medium term and CY21 will see rupee being in the middle of the EMFX pack and not an outlier on either side on spot returns,” she said. (IANS)

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