Market Analysis by Abhishek Goenka: Why is rupee not depreciating till now despite USD strength?

Date:

Trending

The Rupee has been one of the better-performing currencies amid the extreme panic and turmoil we have witnessed in global markets. On previous occasions when we have seen such panic, we have seen three-month Rupee vols spike to 15-20%.

- Advertisement -

So far the vols have not hit 10%. The RBI has averted a run on the currency despite one month offshore points trading above onshore by 80p at one point.

The previous low of 74.50 has held well so far. The central bank deserves credit for the way it has managed the currency so far.

- Advertisement -

It is one of the few central banks globally that has resisted the pressure to cut rates. By keeping the carry elevated i.e. supporting forward premiums, it has kept the cost of going long USD INR high. Elsewhere, we have seen a basis weaken due to USD funding pressure.

It was also one of the first central banks to preemptively address the Dollar liquidity problem by conducting a Sell-Buy swap. It has intervened verbally, through futures and likely even in the offshore market which is unprecedented.

Currencies of economies that have cut rates have exhibited more volatility and have depreciated more viciously.

Tailwinds from crude have also helped but in past instances when we have seen extreme risk aversion, we have had phases in which crude tumbles and Rupee to depreciate.

When the Rupee was in a range, the RBI was bolstering its Reserves. Our Reserve cover for imports and short term external debt is more comfortable than ever before.

The RBI has ensured that adequate Rupee liquidity is available in the banking system by way of LTROs. It has replenished the Rupee liquidity that has been taken out through FX intervention.

Off late, we have seen a massive sell-off in corporate bonds on account of redemption pressure. Spreads have widened even for good credits and maybe that is one area that the RBI may now look to address.

THE SNAPSHOTS

Sign up to get quick snaps of everyday happening, directly in your inbox.

We don’t spam! Read our privacy policy for more info.

- Advertisement -

Support our independent journalism PayPal (Outside India) For PayU (For Indian Readers).

Abhishek Goenka
Abhishek Goenkahttp://ifaglobal.net
Abhishek Goenka, Founder & CEO, IFA Global.

More Latest Stories

More Articles

Fintevex Overview: What Traders Need to Know in 2025

In 2025, the trading world is more competitive than ever. With hundreds of platforms fighting for attention, each promising tighter spreads, smarter tools, and...

Lexus CarPlay and Android Auto Integration

In the ever-evolving landscape of automotive connectivity, Lexus CarPlay and Android Auto integration have emerged as game-changers, providing unparalleled convenience and a seamless driving experience. Are you a Lexus owner looking to maximize your vehicle's smart capabilities? This article dives deep into everything you...

Sifx trading platform: What Traders Looking to Profit Should Really Know

sifx.com is an online trading broker that provides access to multiple global markets through...

Kriscore Capital Launches ₹100 Cr Fund to Back Early-Stage Indian Tech Startups

Kriscore Capital, a newly launched venture firm focused on early-stage Indian technology startups, has...

Operation Sindoor: India, Pakistan Agree to Ceasefire After High-Level Military Talks

India and Pakistan agreed on Saturday to halt all military activities across land, air,...
00:03:27

India Says Pakistan Attempted Large-Scale Drone Incursions, Used Civilian Flights as Cover

India on Friday accused Pakistan of attempting large-scale drone incursions across the western border...

No OTPs, No Hassles: The Rise of Passwordless Digital Payments

India is pacing toward a passwordless future in the digital payments ecosystem. Technologically, it’s...

Why Crypto Traders Are Flocking to Cap-tex Now

A recent surge in cryptocurrency prices, driven by global economic shifts and high-profile endorsements,...
00:01:49

Trump Claims U.S. Trade Threat Helped Defuse India-Pakistan Ceasefire

On Monday, U.S. President Donald Trump said his administration played a key role in easing tensions between India and Pakistan by making future trade...

How AI-Powered Online Platforms Are Revolutionizing Life Insurance Recommendations

Anyone with a child, a spouse, a life partner, or a parent as a...

Loans in Crypto Wallet: Useful Feature or a Security Threat?

Integrating crypto loans into digital wallets is gaining traction, allowing users to borrow and...

Layer PR Wins SME News UK Awards, Expands to Bengaluru

Layer PR, a global public relations firm owned by TechGraph, has secured two major...

How Technology Helps Combat Various Viruses and Diseases

Technology has transformed the ways we approach vaccines, particularly for the flu. One noteworthy...

12 Eye-Popping Hacks to Make Your Next Business Presentation Sparkle

Business presentations are often necessary to gain new clients and showcase what it is you can offer, but more often than not, they end...

The Long-Term Power of Investing: Selecting Undervalued Industries

Investing can seem overwhelming, especially for beginners, as the numerous options and strategies available can make it easy to feel unsure about where to start. However, one time-tested method that stands out is long-term investing—focusing on companies and industries with the potential for growth...

The Impact of EdTech on Student Outcomes in Higher Education

The introduction of interactive whiteboards in the early 1990s marked a major shift in...

Meta Legal Head Offloads Shares worth $577K

Meta Platforms Inc.’s (NASDAQ: META) Chief Legal Officer, Jennifer Newstead, has sold 921 shares,...

Predictive Analytics: The Key to Supply Chain Resilience

In today’s interconnected global economy, supply chains are the lifeblood of businesses, weaving intricate...

Empowering Growth: Boosting the Robotics Sector with Targeted Support

India's robotics sector is emerging as a key area of technological progress, driving innovation...

Software and Technology Changing the Industry

The advent of software and technological advancements has been a game-changer across various industries....

Jensen Huang Offloads $49.8Mn in Nvidia Shares

Nvidia (NASDAQ: NVDA) CEO and President Jen-Hsun Huang has disclosed the sale of 431,611...

Elon Musk’s X Sues Indian Govt Over Content Regulation Clash

X Corp, an Elon Musk-owned social media firm, sued the Indian government in the...

Why Smart Cities Are the Future of Water Conservation

Water conservation has become an important factor due to climate change and worsened water...

Alphabet CEO Sundar Pichai Increases Stocks Holdings Amid Dividend Adjustment

According to a regulatory filing with the U.S. Securities and Exchange Commission (SEC), Alphabet...

Layer PR Wins SME News UK Awards, Expands to Bengaluru

Layer PR, a global public relations firm owned by TechGraph, has secured two major...

Shell Executive Robin Mooldijk Sells €1.69 Mn in Shares

Shell plc’s Projects & Technology Director, Robin Mooldijk, has offloaded 50,000 shares in the...

HR Chief Amy Coleman Reports Over 46,000 Microsoft Shares in SEC Filing

Microsoft (NASDAQ: MSFT) Chief Human Resources Officer, Amy Coleman, has reported her stock holdings...

Alphabet Legal Chief John Kent Walker to Sell $2Mn in Shares via Morgan Stanley

Alphabet Inc.’s (NASDAQ: GOOGL) Chief Legal Officer, John Kent Walker Jr., has filed to...

The Ultimate Guide to Choosing and Using Fonts in Your Design Projects

Fonts play a crucial role in every design project, from branding and web design...

How Technology Helps Combat Various Viruses and Diseases

Technology has transformed the ways we approach vaccines, particularly for the flu. One noteworthy...

Why Smart Cities Are the Future of Water Conservation

Water conservation has become an important factor due to climate change and worsened water...

Interview: Vserve CEO Siva Balakrishnan on SEO Secrets for Amazon Seller Success

In an interview with TechGraph, Siva Balakrishnan, CEO and Founder of Vserve, shared how...

Alphabet CEO Sundar Pichai Increases Stocks Holdings Amid Dividend Adjustment

According to a regulatory filing with the U.S. Securities and Exchange Commission (SEC), Alphabet...