InvestorQ : Why has the rupee been weakening so sharply in the last couple of weeks?
Arti Chavan made post

Why has the rupee been weakening so sharply in the last couple of weeks?

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Rutuja Nigam answered.
4 weeks ago
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During the week, the rupee registered losses for each of the five trading sessions, which is something we have not seen in recent times. On Friday, the INR weakened by 15 paise against the US dollar to 74.73/$. This was triggered by rising COVID-19 cases, weak FPI flows into domestic equities and a stronger USD. FPI flows have been tepid since mid-March and the dollar index or DXY has been strengthening with the recent $2.3 million infra push.

On Wednesday, the rupee cracked by 105 paisa after the RBI announced its bi-monthly monetary policy. The decline was due to the GSAPs, which would result in a glut of liquidity in the Indian markets resulting in weak demand for the rupee and strong demand for the dollar. In the last one week itself the rupee depreciated by 2.5% against the dollar. Next week will be truncated as there are two currency market holidays scheduled.

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