INR vs USD: Rise in crude oil plunges rupee to 1-month low. Experts see more dip

Speaking on INR to USD divergence; Anuj Gupta, Vice President, Commodity & Currency Trade at IIFL Securities said, “Rise in crude oil prices is the main reason for the depreciation of the Indian rupee against the US dollar. Due to the rise in crude oil prices, India’s dollar on oil imports. Spending has increased. To increase pressure on the national current account deficit (CAD). In addition, the recent Fed announcement regarding bond tapering has pushed the US dollar to a one-year high. Against the US dollar This is also one of the main reasons for the fall of the rupee.

Echoing the thoughts of Anuj Gupta; Anindya Banerjee, Deputy Vice President – Currency Derivatives & Interest Rate Derivatives at Kotak Securities, said, “US Dollar index is at nearly 1-year high and crude oil prices are at nearly 3-year high, US bond yields rise on Fed. Expectations of taper and rising inflation. This combination should have knocked USDINR out of the park, but it is not happening due to structurally positive factors for the rupee – European major currencies are performing well against USD, The privatization drive of the Government of India (Government of India) is fueling the sentiments, the inflow of dollars related to the IPO.”

Rupee expected to weaken against US dollar; Anuj Gupta of IIFL Securities said, “Indian Rupee may go down to the level of 75.50 per US dollar by the end of October 2021 as crude oil prices do not see any downside in the near future.”

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