India is seen to be in a much better position than earlier, while the RBI has been shoring up its forex reserves through dollar purchases.
The currency market has entered the most tranquil pre-budget phase since 2010. The rupee has lost about 0.2 per cent against the dollar in the one month preceding the Budget on February 1, signalling the most stable exchange rate since 2010, when the local currency appreciated 0.11 per cent. Normally, the rupee turns volatile on uncertainties emanating from the budget.
A cocktail of factors such as the country’s macro-economic factors, intervention by the central bank and global dollar trades are said to have contributed to the rupee’s relatively calm 30-day period.
India is seen to be in a much better position than earlier, while the RBI has been shoring up its forex reserves through dollar purchases. Although the dollar is losing steam against other major currencies, there is no reversal of dollar trades.
Moreover, speculators have completely gone off the rupee-dollar market and have turned to the other emerging markets of Turkey, South Africa, Indonesia and Russia for their trading bets. This has helped scuttle any wild swings in the domestic currency market. ET takes a look:
Rupee snaps six-session winning streak as firmer dollar pinches
