Rupee Depreciates as RBI Cuts FCNR (B) Swap Facility Deadline
The Indian rupee depreciated by 17 paise to 95.59 against the US dollar in early trade on Monday, as investors' sentiment turned cautious after the Reserve Bank of India's announcement.
This comes after the RBI said that its swap facility for FCNR (B) deposits will be available only for deposits mobilized till August 31, whereas earlier it was set to end on September 30. The facility aims to encourage foreign currency inflows and has already attracted USD 56.84 billion till August 13.
CR Forex Advisors MD Amit Pabari said that the market will eventually begin looking beyond this temporary cushion, despite the support from these inflows remaining significant. He added that technically, the 95.20-95.30 zone is likely to act as an important support area for the rupee.