Re reaches 81/$ for the first time; forex kitty declines by $97bn since peak

The rupee fell to its 81 level against the dollar for the first time on Friday . The rupee ended the week down 1.6%, the lowest level since April 9, 2021 .

MUMBAI (MUMBAI) On Friday, the rupee fell to its 81 level against the dollar for the first time as markets became jittery after the Fed's rate hike and escalation of hostilities in Ukraine.Even as reserves dropped to $546 billion, down by $5 billion during the week ended September 16, and $97 billion lower than their peak of $642 billion last year, the RBI continued to protect the pound.Since the Fed raised rates on Wednesday, the greenback has been gaining in comparison to major currencies, and the dollar index has reached a 20-year peak.The pound and government bonds in the United Kingdom fell in free fall after the UK's greatest tax cuts since 1972.

The rupee has ended the week down 1.6%, the lowest level since April 9, 2021.In the early hours, the dollar was above 81.However, the second half saw some big sales, which dealers said may have been on behalf of the central bank.The rupee finally closed at 80.99, or 12 paise lower than Thursday's close of 80.87.

On account of a negative rupee undercurrent, the spot fell to 80.99, according to K N Dey of United Financial Consultants.The RBI's total intervention in the spot and forward markets, according to dealers, would be well over $100 billion.Although the number was high, dealers said it was reasonable considering the market volatility.With the prospect of a turn for the worse in Ukraine, no one is willing to say that the worst is behind.

The rupee will continue to be pushed for a longer period.We may not see a dramatic decline in India's values if the country's conditions are healthy.According to him, the rupee could be in the range of 80-82.50 in the next three months, cd.December-end.

As the dollar rises, the majority of the currencies are under pressure.Since the Bank of Japan intervened to curb a dramatic decline, volatility in the yen remained stable.The Bank of England released its policy paper and hiked rates by 50 basis points (100bps = 1 percentage point).According to Gaurang Somaiya, a forex and bullion analyst at Motilal Oswal Financial Services, the dollar-rupee would tend to move sideways and reach 80.40-81.20.