Dollar: Rupee closes at new low of 83.4/$

MUMBAI: The rupee closed at a new low of 83.4 against the dollar, down one paisa from the previous close. Dealers said that the new low was only a mathematical development, and the currency has been steady in recent weeks.
Some bankers feel that the move to keep the rupee steady is in keeping with the government’s objective of promoting the rupee globally.Besides liquidity, lower volatility is one of the main pre-conditions for a global currency.

Supporting the currency is a decline in crude oil prices, which have declined to $73 levels. Inflation numbers, which came in on Wednesday at 5.6%, were also lower than some analyst forecasts. Foreign institutional investors were net buyers on Tuesday.
The short-term outlook for the rupee was positive; however, dealers were watching out for any surprises in the US Federal Reserves post-meeting statement, which could add to dollar strength.
The US Federal Reserve is anticipated to maintain current interest rates. However, the central bank’s forthcoming economic projections and dot plot will be closely scrutinized by dealers.
These indicators will provide cues on the potential future path of policy rates. According to the CME Group’s FedWatch tool, investors are currently factoring in the possibility of rate cuts starting as early as May next year.