The Indian rupee has reached its lowest level ever against the US dollar. At the time of filing this report, the rupee was trading at 86.40 against the US dollar.
Experts say that the volatility trend shows that the rupee will fall to 87 by the end of March.
Akshay Chinchalkar, head of research at Axis Securities, says, “According to implied volatility trends, there is an 80 per cent chance that the currency will fall to 87 between now and the end of March, compared to 27 per cent a month ago.”
Akshay said that the rise in treasury yields and the rise in crude oil prices have reduced the prospects for the Indian currency. The rupee has been falling for 16 consecutive weeks, which has never happened in its history.
He said, “India’s rupee fell below 86 this morning, as rise in treasury yields and rise in global dollar on the rise in oil further reduced the prospects for the rupee. Offshore markets continue to bet against the rupee through options, with dollar-rupee out-of-the-money calls traded aggressively last week. “The rupee has now been falling for 16 consecutive weeks, which has never happened in its history.”
