By Nimesh Vora
MUMBAI (Reuters) – The Indian rupee declined on Tuesday, weighed by the dip in Asian peers and increasing interest among importers in hedging their future dollar payments.
The rupee was quoted at 86.94 to the U.S. dollar at 11:37 a.m. IST, down from 86.6950 in the previous session. The rupee, on multiple instances, has not succeeded in moving past the 86.50 level.
On Monday, on the interbank order matching system, the rupee rose to 86.51 before retreating.
“There has been a noticeable pickup in hedging by importers over the last few days, which is understandable,” an fx salesperson at a bank said.
“There is a realisation that the downside (on dollar/rupee pair) is quite limited from 86.50.”
Meanwhile, the dollar index, having climbed to a more than two-month low of 106.35 on Monday, recovered to 106.79. Asian currencies dipped and risk appetite soured as worries over U.S. tariffs returned.
U.S. President Donald Trump on Monday said tariffs on Canadian and Mexican imports were “going forward on time and on schedule” in reply to a question on whether Canada and Mexico had done enough to avoid the 25% U.S. duties.
The U.S. president had previously agreed to a 30-day pause on the tariffs.
“The direction of U.S. protectionism will be the main driver beyond the short term, and we should see the discussion on Mexico and Canada tariffs return to centre stage as the deadline for the delayed tariffs is a week away,” ING Bank said in a note.
(Reporting by Nimesh Vora; Editing by Janane Venkatraman)
