The Indian Rupee depreciated by 8 paise to 71.34 against the US Dollar in early trade on 11 November. The fall in early trade is due to US-China trade war concerns, as well as global rating agency Moody’s downgrade of India’s outlook from stable to negative last week.
In early trade, the currency opened at 71.36 a dollar, down 0.15% from Friday's close of 71.29. The Indian Rupee attained an intra-day high of 71.31 and low of 71.38 during trading so far. Asian currencies fell after US President Donald Trump on Friday said that the US government has not agreed to roll back all China tariffs.
“Rupee depreciates post Moody’s downgrade, US-China trade tensions again and rising layoffs by Indian information technology companies,” said market analyst Vivek Mittal, adding that Foreign Institutional Fund inflows are likely to support the Rupee. According to provisional exchange data, FIIs purchased shares worth Rs. 932.20 crore ($132 million) on Friday.
Moody's said its action "partly reflected government and policy ineffectiveness in addressing economic weakness, which in turn, led to an increase in debt burden from already high levels for its action".
Speaking at the launch of a book titled, “The Rise of Finance: Causes, Consequences and Cure” – co-authored V Anantha Nageswaran and Gulzar Natarajan, in New Delhi on Sunday, Finance Minister Nirmala Sitharaman said the Indian economy is facing challenges. “Questions are being asked about the nature of the slowdown, which is affecting the global economy and bogging it down. We are currently facing a challenging time.”
In what could be termed protectionist trade practice, the Trump administration has repeatedly increased tariffs on Chinese imports thereby initiating a trade war with the country. Beijing, on its part, imposed retaliatory tariffs to counter Washington. US Ppresident Donald Trump said last week that Washington was ready to finalise a trade pact with China but denied that the US administration has already agreed to phase out tariffs.