Mumbai, September 28 – The Indian rupee opened with minimal changes against the US dollar on September 28, as market participants eagerly awaited FTSE Russell’s decision regarding India’s potential inclusion in the emerging markets government bond index. At 9:15 am, the rupee was trading at 83.22 to the dollar, representing a marginal 0.01 percent decrease from its previous close.
Analysts suggested that a positive decision by FTSE Russell could potentially drive the rupee towards the 82.90 to 83 range. Such a move would serve as a significant boost, particularly following JPMorgan’s recent decision to incorporate India into its widely monitored emerging market index. Under this decision, Indian bonds will be integrated into the Government Bond Index-Emerging Markets index, effective from June 28, 2024.
The rupee’s performance has been influenced by various factors, including the US Federal Reserve’s hawkish stance, which hints at impending interest rate hikes. Additionally, the 10-year yield reached a 16-year high at 4.5 percent, and the dollar index has surged to 106.34, marking levels not seen since November. These developments, coupled with rising bond yields, a robust dollar, elevated oil prices, more stringent financial conditions, concerns about economic growth, reduced risk appetite, and increased vulnerability in equity markets, have collectively impacted global markets.
Asian currencies have largely struggled under these conditions, with the South Korean won declining by 0.46 percent, the Malaysian ringgit by 0.4 percent, the Thai baht by 0.26 percent, and the Indonesian rupiah by 0.2 percent. Meanwhile, the Japanese yen and China Offshore showed modest gains of 0.1 percent and 0.12 percent, respectively.
The dollar index, which gauges the strength of the US currency against major global currencies, was trading at 106.68, reflecting a marginal 0.01 percent increase from its prior close at 106.67.