The Indian Rupee softened against the US Dollar as the afternoon began following the announcement by the International Monetary Fund that it had cut its global outlook for the year.
Earlier in the session the Rupee made gains as investors eased their demand for safe haven currencies. Traders and economists increased their bets that the ongoing political deadlock in the USA will be resolved shortly after President Barrack Obama revealed that he was prepared to negotiate over the US budget. The US also came under increasing pressure to make a deal to raise its debt ceiling after its main debtors, China and Japan warned that if the US defaults then it will have a negative impact on the world’s economy.
As the session entered the afternoon the IMF announced its cut to its global economic outlook. It warned that capital outflows would further damage emerging markets such as India and that a US government default could ‘seriously’ harm the world’s economy.
“Advanced economies are gradually strengthening” while “growth in emerging-market economies has slowed, This confluence is leading to tensions, with emerging-market economies facing the dual challenges of slowing growth and tighter global financial conditions” IMF chief economist Olivier Blanchard wrote in a foreword to the World Economic Outlook report.
Yesterday saw the Indian Central Bank reduce the marginal standing facility rate, the rate which it lends emergency funds to banks, by 50 points to 9% in an effort to boost liquidity conditions in the nation’s banks.
“Despite yesterday’s announcement regarding cut in the MSF, rupee was not seen gaining today,” said Abhishek Goenka, CEO of India Forex Advisors. “The overall international markets were also seen trading flat.”
Current Rupee (INR) Exchange Rates:
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 99.5360 >
The Euro/Indian Rupee Exchange Rate is currently in the region of: 83.9539 >
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 61.8675 >
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 58.4395 >
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 51.3135 >
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 59.8900 >
(Correct as of 14:30PM GMT)
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