These are the Top reasons why INR falling against Dollar

These are the Top reasons why INR falling against Dollar

Risk appetite has diminished, according to forex traders and market watchers, as US bond rates have risen and inflation fears have grown.

Indian rupee remained near record lows against the US dollar on Tuesday, trading at 77.24, extending its losses for the third day. The rupee fell 54 paise to a record low of 77.44 versus the US dollar on Monday, weighed down by the dollar's strength overseas and continuous foreign money outflows.

The rupee fell 55 paise to settle at 76.90 on Friday. Risk appetite has diminished, according to forex traders and market watchers, as US bond rates have risen and fears about inflation have grown, perhaps prompting more aggressive rate rises by global central banks.

According to a PTI report, Royce Vargheese Joseph, Research Analyst - Currency and Energy, Anand Rathi Shares and Stock Brokers, highlighted the stronger dollar, dramatic sell-off in equities markets, increased oil prices, and growing domestic inflation as causes for the rupee's slide.



According to Joseph, the Indian Rupee spot fell to new lows, reflecting weakening in Asian rivals amid a stronger dollar index and rising US government rates.

As real rates in the US rose, investors were more risk apprehensive, weighing the necessity for a greater rate rise to keep inflation under control in the future, according to Joseph.

Rising domestic inflation, which is far above the Reserve Bank of India's (RBI) upper range, may trigger further FII selling of domestic securities, Joseph explained. Somaiya further stated that the focus this week would be on inflation statistics from India and the United States.

RUPEES TO DOLLAR

Somaiya said: "We expect the USDINR (Spot) to trade with a positive bias and quote in the range of 77.20 and 77.80,"

Joseph said: "Meanwhile, RBI's off cycle meeting on 4th May did little to strengthen the Rupee. Going forward, we might see the rupee spot weakening towards 77.8 levels.

Trivedi said: "I look at the rupee continuing its downward journey as the dollar rise is a major risk to prices. A relief on the rupee front can only be seen if the dollar index cools off"