Rupee slides and there is every likelihood the pressure will keep mounting in the next few days. Image Credit: Reuters

Dubai: The Indian rupee has come under renewed pressure, opening up chances for higher remittance outflows over the next few days as Indian expats make full use of the situation.

On Tuesday (November 30), local currency houses were exchanging the dirham briefly at 20.42, before settling at 20.35. But sources say that the rupee could break the 20.50 to the dirham in the next couple of days, unless the Indian central bank decides it is time to intervene.

“Even last month, the 20.50 level was crossed – more foreign fund outflows in the next few days will see the rupee again hitting that spot,” said a senior official at LuLu Exchange. “It is the foreign funds flowing into the country that has lifted the rupee each time it dropped in recent weeks.

“But in the last few days, the Indian stock markets have seen drops of 1,000-1,500 points, mostly brought on by foreign funds selling their stakes. This is the reason why rupee is again under pressure.”

We expect USD/INR to be 75.34 during the week if it breaches 75.20 levels. It is now at 75.15

- Senior spokesperson at LuLu Exchange

Markets turn wary

Worldwide, markets are turning wary over the new COVID-19 variant – the Omicron – and whether this will imperil the recovery in the global economy. “The latest rupee decline was expected because of the market correction,” the LuLu Exchange official added. “Only thing to look out for is how much further the rupee will drop as a result. Or when the central bank comes in with a holding act to stabilise the currency.