Moves in the Chinese economy have had a knock-on effect on the Indian rupee exchange rate. The main regulator for Forex in China stated that it was going to focus on trying to keep the currency from going too far up. This had an effect on the yuan, which in turn raised the prospects of the rupee, with both rallying.
Over the last week, it has risen from around 82.70, peaking at 83.29 and then falling to 82.91. It is overall still on a positive climb. When it comes to the yuan, the picture is similar. It managed to rally up around 1.00%, peaking as high as 7.29 against the US dollar again.
The regulator said that its priority was to make sure the yuan did not rise too high this Monday. This aided the yuan in rising modestly, reflecting a positive mood. Furthermore, the regulator said that it had to curb any cyclical practices that were present. The bump in the yuan followed shortly afterwards.
Impact of Positive Yuan Movement
The yuan’s jump also had help from the yen, which rose after indications from the Bank of Japan. They made similarly hawkish statements on policy, boosting the yen. This positive movement by the yuan in response to the Bank of Japan may have encouraged Chinese regulators.
There were further factors influencing the USD/INR and the rupee exchange rate generally. Demand for the dollar from oil companies has a major impact. This was according to a Forex trader. Those importing will likely be paying around 82.80 or near it for the India rupee rate, they added.
However, the US dollar index has been weak recently in the Asian market. It stood at 104.58 in Asian hours, with 10-year treasury yields in the US going up to 4.29%.
Traders now think the Indian rupee rate today will remain between 82.70 and 82.97.
