For the week, 0.9% rupeefell – biggest weekly drop since week to Oct 8
The rupee recorded its worst week in seven weeks on Friday, while the 10-year benchmark yield closed at its lowest level in more than two weeks as fears of a COVID variant spooked markets across the globe. bridge. The partially convertible rupee ended at 74.87 against the dollar from its close of 74.51. It hit a low of 74,9250 earlier, the lowest since Nov. 1.
The rupee erased all gains for the month while suffering its worst weekly drop of 59 pails since Oct. 8 on month-end dollar demand and anticipation that the US Federal Reserve will accelerate asset cuts and rate hikes around mid-2022, analysts said.
Stocks and currencies in emerging Asian markets fell sharply as investors fled riskier assets after spotting a significant surge, thereby underpinning haven assets. as safe as the dollar. The dollar index, which measures the greenback’s strength against a basket of six currencies, is trading down 0.34% at 96.44 but capped losses on fears of a new COVID variant.
For the week, the rupee fell 0.9 percent – its biggest weekly drop since the week to Oct. 8, marking five straight weeks of gains. The benchmark 10-year yield ended at 6.33% – its lowest close since Nov. 9 and down 4 basis points on the day.
The Reserve Bank of India will announce the decision of its monetary policy committee after its three-day meeting on December 8 and a large part of the market has been expecting it to start increasing the reserve repo rate to attempt to normalize the policy-rate corridor to pre-pandemic levels.
The central bank has begun conducting variable-rate repurchase tenders for slightly longer maturities to temporarily absorb the huge liquidity surplus in the banking system but has so far avoid announcing any more permanent measures.
Traders expect the 10-year bond yield to trade between 6.25% and 6.40% until a policy decision is made, while the rupee is expected to largely follow Domestic stocks and dollar moves to find direction.
Oil prices fell more than 5% to a two-month low as fresh oil prices added to expectations a supply surplus could widen in the first quarter.
