BRICS member India’s local currency the Rupee is falling to a new low on Monday against the US dollar. The Indian Rupee plummeted to 83.38 as the US dollar gained strength against all the BRICS local currencies this month. The Rupee is relentlessly experiencing a dip due to various factors including local and international financial pressure. Despite India’s thriving economy, the Rupee’s lackluster performance in the currency market is a cause of worry for the Modi administration.
Also Read: BRICS: De-Dollarization Gaining Steam in Developing Countries
BRICS: What’s Happening With the US Dollar and the Indian Rupee?
The Rupee’s fall comes after leading global banks and traders were seen bidding for the US dollar and not the Rupee. The move was most likely initiated on behalf of institutional and custodial clients of the global banks. The result led the Rupee to become “sticky in the 5-10 paisa zone near 83.30” said a trader to Reuters.
Also Read: BRICS: US Dollar Top Loser as Saudi Arabia Pays Chinese Yuan For Trade
The development isn’t limited to the Rupee alone, as Asian currencies performed below expectations against the US dollar this quarter. BRICS currencies like the Chinese Yuan, South African Rand, and Argentina’s Peso, among others, fell to new lows in Q4 of 2023.
The Rupee is expected to remain between its support and resistance level and most likely will not move strongly in both directions. “Broadly, the rupee is likely to stay rangebound but small depreciations can’t be ruled out,” said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.
Also Read: BRICS: China, Russia & India To Replace the US Dollar in Global Trade?
However, Nuvama Alternative & Quantitative Research warned that the Indian equity markets could receive an inflow of $1.5 billion soon. The inflows are related to the rebalancing of the MSCI index and will be effective from November 30, 2023.
The Rupee might trade higher in December next month after the rebalancing of $1.5 billion in the equity market. Therefore, BRICS member India’s only chance to outperform the US dollar could be in December 2023.