dropped to 72.2425 per dollar earlier this month, a whisker away from a nine-month low of 72.4075 set in September. A breach of support around those levels may see it weaken toward 73.0217, the 76.4% retracement of its rally from October 2018 to July 2019, according to Fibonacci analysis. It closed at 71.715 on Friday.
The Reserve Bank of India
has added to the rupee’s downdraft by cutting its benchmark repurchase rate by a combined 135 basis points starting in February. That has pushed down bond yields and sapped foreign demand for the nation’s debt.
At the same time, the RBI has boosted dollar purchases to increase rupee liquidity in the financial system, as shown by foreign-exchange reserves climbing to a record $448 billion.
A more pronounced growth slowdown than other regional emerging markets
and one of the most aggressive rate-cutting cycles in Asia “has resulted in a major headwind for the rupee,” said Peter Chia, a strategist at United Overseas Bank Ltd. in Singapore. “The RBI’s rate cuts, almost twice the amount delivered by the Fed, have eroded the interest-rate advantage the rupee has over the dollar, denting its attractiveness as a high yielder.”
Below are the key Asian economic data and events due this week:
Monday, Nov. 25: Singapore CPI, BOJ bond purchases, Taiwan industrial production and Philippines budget balance
Tuesday, Nov. 26: Japan services producer prices, Singapore industrial production and Reserve Bank of Australia Governor Lowes speech
Wednesday, Nov. 27: RBNZ publishes financial stability report, New Zealand trade, China industrial profits
Thursday, Nov. 28: Japan retail sales and foreign bond buying
Friday, Nov. 29: India GDP, South Korea rate decision, Japan CPI, industrial production and jobless rate, South Korea industrial production, Thailand trade and FX reserves.