Dubai: Although the Indian rupee briefly rebounded from remittance-beneficial rates against the US dollar and the UAE dirham these past days, Dubai-based forex analysts flag currency depreciation this week, giving hope to those looking to remit money back home.
The value of the currency deppreciated by 15 paise on Monday after last closing at Rs20.52. Check the latest forex rates here. The Indian rupee has been under pressure exerted by high oil prices, and the resultant inflationary pressures in the country.
Both these pressures are expected to keep the Indian rupee under pressure this week, analysts warn. Lately, the Brent crude oil price has remained elevated due to the Russian-Ukrainian war. The price has hovered in the range of $100-$110 in the last few weeks.
At the Indian interbank foreign exchange, the rupee opened at 75.94 against the US dollar. Last week, the rupee closed at 75.90 to a greenback. Weakness in the rupee's value against the US dollar will be automatically reflected in its exchange rate with the UAE dirham as the UAE currency is pegged to the dollar.
"Rupee has been under pressure due to rising US bond yields, inflation and high crude oil prices. These circumstances are going to be tough for the Indian rupee to appreciate. We can expect rupee to trade between 75.50 and 76.25 in the next week," said Sajal Gupta Head of Fx and Rates at India-based Edelweiss Securities.
Eyes on inflation
"This week is a relatively shorter week but market participants will be keeping an eye on the inflation and industrial production number to gauge a view for the currency," said Gaurang Somaiya, Forex and Bullion Analyst, India-based Motilal Oswal Financial Services.
"Expectation is that inflation could remain elevated following the recent rise in energy and food prices. On the other hand, industrial production could grow at a slower pace in January and could further weigh on the currency."
The Indian Central Statistics Office (CSO) is slated to release the macro-economic data points of Index of Industrial Production (IIP), Consumer Price Index (CPI) on March 12.
On the other hand, expectations of India Inc's healthy fourth quarter results season should attract fresh equity focused foreign funds which might cub any sharp weakness in the Indian rupee versus the US dollar.
"Dollar index have surged past week and it is now trading near crucial psychological mark of 100," said Devarsh Vakil, Deputy Head of Retail Research, India-based HDFC Securities.
"Rupee is likely to consolidate next week on back of improving sentiments for equity markets. In near term, spot USD-INR expected to trade in the range of 76.20 to 75.70. with bias towards appreciation."
