IGI Logo

Quote on Rupee 06 October 2022 By Ms. Sugandha Sachdeva, Vice President - Commodity & Currency Research, Religare Broking Ltd.

A resurgence in crude oil prices from recent lows of around $83 a barrel is weighing on the Indian rupee while fueling concerns about the rising import bill and elevated price pressures. Crude oil prices have perked up to a three-week high as OPEC+ producers have decided to cut oil output by 2 mbpd, the largest production cut since 2020 which is likely to aggravate the tight supply situation ahead of the impending European Union sanctions on Russian and oil products. However, as many OPEC producers are unable to meet their output targets, the actual cuts would be around 1mbpd amid the backdrop of a weakening global economy.

Besides, there is a great deal of uncertainty about how long the US Fed will continue with its restrictive policy stance considering the slowdown in growth momentum, which has led to a softening of the dollar index and is still underpinning the domestic currency. Looking ahead, we envisage the rupee to depreciate towards 82.80 mark, while markets now look forward to the key US jobs data for further cues about the strength of the labor market in the US.

Above views are of the author and not of the website kindly read disclaimer