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Time of India
09-05-2025
- Business
- Time of India
Rupee faces worst single-day loss since February amid growing border conflict
Agencies Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Mumbai: The rupee on Thursday logged its worst single-day loss since February 2023, its pace of retreat accelerating toward the late afternoon, over mounting concerns the border conflict with Pakistan could linger and engulf a wider geography than anticipated rupee lost more than a percentage point - equivalent to 90 paise - through a single trading session to end at 85.71 per dollar Thursday, LSEG Data showed. It had lost about 40 paise Wednesday after Operation Sindoor struck deep at the heart of the Pakistan-sponsored terror establishments to avenge the deaths of innocent tourists in J&K two weeks rupee's trading amplitude mirrored the volatility in other financial assets. It traded in the range of 84.52/$1 to 85.79/$1."Dollar demand spiked after about 2pm and there was a lot of short covering seen from traders. Oil companies were also buying and the dollar index also saw an uptick, which acted as headwinds for the rupee," said Dilip Parmar, currency analyst, HDFC Reserve Bank of India (RBI) likely intervened lightly, but even the central bank's support wasn't sufficient to shield the local weakening of the rupee past 85.50 levels posed a good opportunity for exporters to hedge, traders said."Many exporters booked their forwards today," said Ritesh Bhansali, deputy CEO, Mecklai Financial forward premiums also jumped with the one-year implied yield rising 16 basis points to a near one-month high of 2.34%, according to LSEG data. Geopolitical uncertainty could weigh on the rupee, pushing it to levels of 86.50/$1 to 87, traders on the 10-year benchmark government security closed at 6.39%, four basis points higher than the previous close. The bond traded in the yield range of 6.31% to 6.40% on Thursday, CCIL data showed. Bond yields started hardening around 2 pm, too, dealers said. They expect yields to rise 3 to 5 basis points if the uncertainties continue.'When the markets opened today, they were calm in the first few hours because retaliation was measured. But looking at what we are seeing from Pakistan, yields went up sharply in the second half of the session,' said a senior trader from an insurance company. Some traders are, however, seeing this as a buying opportunity, as prices have reduced, with the new 10 year — the 6.33% GS 2025 — paper even trading at a discounted price.'We are likely to see more of such reactions, and prices will likely fall further. But I do not see this escalation going on for a long time,' said Mataprasad Pandey, vice president, Arete Capital Services. 'Hence, this presents a good buying opportunity, as when yields soften, there will be good profits.'
Mint
08-05-2025
- Business
- Mint
Rupee falls 89p, the most since Feb 2023, as India-Pak tensions rise
Mumbai: The Indian rupee fell nearly 1% on Thursday amid rising tensions between India and Pakistan. The domestic currency opened at 84.61 and moved between an intra-day high of 84.52 and a low of 85.77 against the dollar. It closed 89 paise lower at 85.72 after ending at 84.83 against the dollar on Wednesday, marking the worst day since 6 February 2023. Both the currency and stock markets declined on Thursday after India confirmed it had targeted air defence radars and systems at a number of locations in Pakistan, while Pakistan's military said it had shot down 25 Indian drones. The rise in dollar index also aided in the rise of dollar-rupee. The dollar index, which gauges the dollar's strength against a basket of six currencies, was trading higher by 0.46% at 100.07. 'With hostilities increasing and if RBI does not step in, we can see the rupee reach even 87 tomorrow with a more than 1 rupee movement seen today, 'said Anil Kumar, head of treasury and executive director at Finrex Treasury Advisors LLP. Meanwhile, the Reserve Bank of India (RBI) was found intervening in the market at different levels over the last two days to reduce volatility and is expected to be active in the coming days. In March, the rupee appreciated sharply from 87.5 to 85 in just 20 days owing to a correction in the dollar index. The dollar gauge has corrected by 7.8% since January this year. 'Importers have hedged reasonably well when the rupee dipped from 87.5 to 85. But exporters had missed the bus when the rupee appreciated over the last 2 months. But they are now in the market hedging their positions,' said Ritesh Bhansali, deputy chief executive officer, Mecklai Financial Services Pvt Ltd. Dilip Parmar, research analyst at HDFC Securities, said the market sentiment remains subdued due to persistent geopolitical anxieties and the potential for foreign fund outflows. 'The USDINR spot rate faces resistance at ₹ 86.40 and finds support at ₹ 85," he said. 'The bias has shifted to weak following the rise in conflict.'
