Rupee Depreciates as RBI Swap Facility Deadline Nears
The Indian rupee declined by 17 paise to 95.59 against the US dollar in early trade on Monday, according to business-standard.com. The Reserve Bank of India's (RBI) recent announcement has had a significant impact on the currency market.
The RBI said its swap facility for FCNR (B) deposits will be available only for deposits mobilized till August 31. This change in policy has led to investors' sentiment turning cautious, causing the rupee to depreciate.
CR Forex Advisors MD Amit Pabari noted that despite attracting nearly $50 billion of foreign exchange inflows, the market will eventually begin looking beyond this temporary cushion.
Pabari predicted that technically, the 95.20-95.30 zone is likely to act as an important support area. If this level holds, USD/INR could move towards the 96.20-96.50 region in the coming days.