\nThe Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar \u2013 most trade is conducted in USD \u2013 and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.<\/p>\n<\/section>\n\nThe Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the \u2018carry trade\u2019 in which investors borrow in countries with lower interest rates so as to place their money in countries\u2019 offering relatively higher interest rates and profit from the difference.<\/p>\n<\/section>\n\nMacroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.<\/p>\n<\/section>\n\nHigher inflation, particularly, if it is comparatively higher than India\u2019s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.<\/p>\n<\/section>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
\u00a0<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
Indian Rupee softens in Friday\u2019s Asian session.\u00a0 The month-end importer USD bids and likely position unwinding weigh on the INR.\u00a0 The US August PCE Price Index data will take center stage on Friday.\u00a0 The Indian Rupee (INR) loses momentum on Friday amid the renewed US Dollar (USD) demand from importers related to month-end payments and […]<\/p>\n","protected":false},"author":2,"featured_media":8374,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[173],"tags":[201,248,251,246,257,2070,255,289,250,333,252,247,253,249,5212,1109,256,254],"class_list":["post-356963","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-others","tag-blockchain","tag-bsc","tag-chainlink","tag-coin","tag-cryptocurrency","tag-emergingmarkets","tag-gta","tag-india","tag-looks-rare","tag-macroeconomics","tag-oracle","tag-polygon","tag-quickswap","tag-safe-moon","tag-seo","tag-usdinr","tag-wallet","tag-wordpress"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/356963","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=356963"}],"version-history":[{"count":3,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/356963\/revisions"}],"predecessor-version":[{"id":356969,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/356963\/revisions\/356969"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/8374"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=356963"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=356963"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=356963"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}