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India's Central Bank Sells Dollars As Rupee Threatens To Fall To Record Lows

John Galt

Updated: October 5, 2022

dollar rupee
Editor’s Note:

EDITOR'S NOTE: State-run Indian banks are selling dollars as the Indian rupee continues to plunge toward historic lows. Since 2008, the rupee has returned -51% against the US dollar, while gold has risen as high as 120% against the Indian rupee. Indian banks are closed for a total of 21 days this October. As its currency continues to slide, we wonder what role the new (gold-backed) BRICS reserve currency will play in the Indian economy. As the US Federal Reserve continues to raise interest rates, the dollar has risen tremendously against all major global currencies. But weakness in a basket of foreign currencies isn’t necessarily a sign of dollar strength. The dollar is rapidly losing its purchasing power. Our experience at the grocery store and gas pump is our anecdotal evidence. And what is money other than purchasing power?

MUMBAI, Sept 29 (Reuters) - The Indian central bank likely sold dollars via state-run banks on Thursday as the rupee gave up most of its intraday gains and threatened to fall to new record lows, traders said.

The intervention by the Reserve Bank of India was confirmed to Reuters by two bankers and a brokerage firm.

The rupee was last trading at 81.92, almost flat from 81.94 in the previous session and within striking distance of the 81.95 record low.

The local unit earlier in the day had risen to 81.5875.

The rupee was not able to sustain the gains on dollar demand from foreign banks and from oil refiners, traders said. The rebound on the dollar index and Treasury yields marching higher after Wednesday's pullback further pressured the rupee.

Reporting by Nimesh Vora; Editing by Savio D'Souza

Our Standards: The Thomson Reuters Trust Principles.

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