Donald Trump's victory has started to affect the Indian rupee. The Indian rupee fell to an all-time low against the dollar on fears of a stronger dollar in Trump's new term. Today, Thursday, the rupee fell to 84.29 paisa against 1 dollar, which was 84.28 the previous day.
Analysts say Trump's second term in tax cuts and deregulation policies could boost U.S. growth. This will increase investors' attraction to the dollar. As a result, there may be a negative impact on the Euro and Asian currencies. Asian currencies were somewhat stable on Thursday, but fell as much as 1.8 percent the previous day. On this day, the dollar index decreased by 0.1 percent to 104.9.
Traders said the Reserve Bank of India (RBI) may intervene to prevent the rupee from falling. The RBI is gradually allowing the rupee to appreciate, but for now it will remain in the range of 84.40, said a single trader at the bank.
Apart from this, as foreign investment money leaves the stock market, the pressure is increasing on the rupee. Foreign investors sold over $1.5 billion worth of Indian stocks in early November. Its total size stood at $11 billion last month.
On this day, India's top index BSE Sensex and Nifty-50 index fell by 0.5 percent.
Citibank said further depreciation of the rupee depends on the RBI's decision and India's inflation relative to global inflation.
Investors in India are eyeing the US Federal Reserve's policy decision, which will be announced at midnight. The Federal Reserve is expected to cut interest rates by 25 basis points. In addition, investors are also waiting for the indication of Federal Reserve Chairman Jerome Powell about the future interest rate of the benchmark.
