Indian rupee at historic low against Omani rial, crosses 200 mark
Published: 07:05 AM,May 09,2022 | EDITED : 11:05 AM,May 09,2022
MUSCAT: India’s rupee and China’s yuan were among the Asian currencies, which suffered the most losses in the morning trade on Monday due to the ever-increasing dollar strength.
According to reports from the local money exchanges, the Indian rupee touched a fresh all-time low of 201 against one Omani rial. On the Indian market, it was trading beyond 77.40 per dollar.
While on Friday, the Indian currency ended close to its all-time lows of 77.05 hit in March, it weakened sharply today and was the last trading at 77.42 per dollar, according to the latest quotes from agencies.
Other South Asian currencies like the Pakistan rupee and Bangladeshi taka did not have much difference as they opened trading at 486 and 235 respectively against one Omani rial.
China’s yuan extended losses to a new 18-month low in early trade on Monday as persistent dollar strength and worries over the slowing economy piled more pressure on the currency.
According to experts, a surge in US Treasury yields following an aggressive rate hike by the Federal Reserve caused the dollar to strengthen globally.
According to Ravi Shekhar, General Manager, Musandam Money Exchange, investors’ flight to other safe havens also followed lockdowns in China and fear of higher interest rates by other central governments.
“Higher bank rates tend to encourage saving and discourage spending, thus reducing the money supply in the country and therefore inflation”, he said.
The rate hike by the Reserve Bank of India following a rise in the country’s inflation has not been able to stem the rupee’s decline, Ravi said.
The banking regulator in India has been using its forex reserves to stem the currency’s losses.
Weakness in domestic equity markets and concerns over relentless sales of Indian assets by overseas investors also dragged the Indian currency lower.
Central banks around the world tend to raise their rates in response to the Federal Reserve’s actions. Some Gulf banks raised their rates in March, the last time the Fed hiked rates.
Saudi Arabia, the UAE, Qatar, and Bahrain all raised rates by the same amount as the Federal Reserve, though Kuwait did so by a smaller margin. Reuters called this a “less hawkish” move that could reflect Kuwait being relatively less concerned about inflation.
Inflation is rising around the world, including in the Gulf countries, though inflation in the region is not nearly as bad as it is in other parts of the Middle East, such as Turkey.
According to reports from the local money exchanges, the Indian rupee touched a fresh all-time low of 201 against one Omani rial. On the Indian market, it was trading beyond 77.40 per dollar.
While on Friday, the Indian currency ended close to its all-time lows of 77.05 hit in March, it weakened sharply today and was the last trading at 77.42 per dollar, according to the latest quotes from agencies.
Other South Asian currencies like the Pakistan rupee and Bangladeshi taka did not have much difference as they opened trading at 486 and 235 respectively against one Omani rial.
China’s yuan extended losses to a new 18-month low in early trade on Monday as persistent dollar strength and worries over the slowing economy piled more pressure on the currency.
According to experts, a surge in US Treasury yields following an aggressive rate hike by the Federal Reserve caused the dollar to strengthen globally.
According to Ravi Shekhar, General Manager, Musandam Money Exchange, investors’ flight to other safe havens also followed lockdowns in China and fear of higher interest rates by other central governments.
“Higher bank rates tend to encourage saving and discourage spending, thus reducing the money supply in the country and therefore inflation”, he said.
The rate hike by the Reserve Bank of India following a rise in the country’s inflation has not been able to stem the rupee’s decline, Ravi said.
The banking regulator in India has been using its forex reserves to stem the currency’s losses.
Weakness in domestic equity markets and concerns over relentless sales of Indian assets by overseas investors also dragged the Indian currency lower.
Central banks around the world tend to raise their rates in response to the Federal Reserve’s actions. Some Gulf banks raised their rates in March, the last time the Fed hiked rates.
Saudi Arabia, the UAE, Qatar, and Bahrain all raised rates by the same amount as the Federal Reserve, though Kuwait did so by a smaller margin. Reuters called this a “less hawkish” move that could reflect Kuwait being relatively less concerned about inflation.
Inflation is rising around the world, including in the Gulf countries, though inflation in the region is not nearly as bad as it is in other parts of the Middle East, such as Turkey.