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Despite the challenges on the economic front, the rupee strengthened 4 percent in the current financial year

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Mumbai:

The rupee has strengthened more than 4 percent in the current financial year against the US dollar. Despite the challenges on the economic front with the continued flow of foreign capital and the policies brought out by the RBI’s thought-provoking policies, a strong 2020-21 year has been ensured for the Indian currency. Experts said this. According to experts, on an average the rupee can range from 73.50 to 74 in 2021-22. The reason for this is that despite the vaccine, there are apprehensions about the corona virus and its effect can be seen on the foreign exchange market. The financial year 2020-21 was a volatile year for Rs. Due to the widespread selling in the equity market, the rupee had gone up to 76.90 at one time. However, with the introduction of the vaccine, expectation loosening, lockdown restrictions, worldwide stimulus measures by governments and central banks created a confidence among investors and brought the rupee to a level of 72.

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“Despite the challenges on the economic front and the high fiscal deficit, the government’s thought-provoking policies resulted in lower returns of government securities this year and overseas,” said HDFC Securities Deputy Chief (Retail Research) Devarsha Advocate. Money reserves increased significantly. “He said that the rupee strengthened 4 percent against the US dollar in 2020-21, despite higher interest rates and inflation against the US.”

According to experts, a strong year has been ensured for the Indian currency due to continuous capital inflows into the listed stocks of the country. Foreign investors invested $ 35.22 billion in the current financial year. This is the highest since 2014-15. India attracted $ 67.54 billion of foreign direct investment in the first nine months of 2020-21, the highest ever.

Shriram Iyer, senior research analyst at Reliance Securities, said, “The rupee fluctuation is not surprising as the Reserve Bank has given necessary support to the rupee through monetary policy and necessary intervention in the foreign exchange market.” Apart from this, the rupee was also supported by continuous capital inflows into the domestic stock market. Experts say that in India and other countries of the world, the increasing cases of Kovid-19 is a major concern for the rupee. But with this, the trend of rupee will be determined by the situation arising out of the ‘Tapper Tantrum’ (2013 when the US Federal Reserve suddenly started to reduce the purchase of government securities).

Gupta said, “The interest rate by the Federal Reserve and the tax hike in the US is a big challenge.” He said, “I think the Federal Reserve will not raise the interest rate this year but could slow down the bond purchase program by the end of the year It is … This may have some impact on the currencies of emerging markets including India. ”

(This news has not been edited by the NDTV team. It has been published directly from the Syndicate feed.)

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