The dollar rally is also a reflection of investors increasing flight-to-safety bets as Asian markets risk experiencing crisis-level stress again, as two of the most significant currencies in the region have collapsed under the assault of unrelenting dollar strength - the yen and the yuan.ĭue to the widening gap between the ultra-hawkish Federal Reserve and the dovish policymakers in China and Japan, the yuan and the yen are falling. Interest rate hikes in the United States and an aggressive policy stance by the Federal Reserve forced a dozen other nations to do so last week, underscoring global economic slowdown risks, which has led to the onslaught of relentless sell-off in global financial markets and a dollar rally. We expect RBI to hike rates by 50 bps to cool stubbornly high inflation and prevent the currency from weakening further,' Mr Iyer added. 'Focus now shifts to RBI's meeting this week, with its decision due on Friday. The Indian rupee is likely to remain weaker as investors expect that the US Fed will continue to hike interest rates aggressively to cool inflation, Sriram Iyer, Senior Research Analyst at Reliance Securities, told PTI. Another potential explanation for the rupee's decline is this depletion. Later in the week, the Reserve Bank of India is set to raise rates too, but by how much has split policy watchers widely.ĭue to the RBI's market intervention to protect the weakening rupee and for the country's trade settlement, India's foreign exchange reserves have been steadily declining for the past few months.

The rupee range can be seen between 80.50-81.55 before RBI policy,' he added.

'The next trigger for the rupee next week is the RBI policy which shall provide some respite to the rupee fall. The rupee downtrend will continue as long as positive triggers are not witnessed from the inflation forefront,' Jateen Trivedi, Vice President - Research Analyst at LKP Securities, told ANI. 'The panic is created by the dollar index which witnesses strong buying as a strong hedge against interest rate hikes and inflation cycle.

Currency of all countries in rupees