'Indian rupee on path of strength...!' Dr. Matthew Joy

By: 600011 On: Mar 1, 2024, 2:19 PM


Dr. Matthew Joyce, Las Vegas.

The Indian rupee has lost less than 1% of its value against the dollar this past year, compared with the Chinese yuan's more than 3% decline, the South African rand's nearly 9% slide and the Japanese yen's 11% slide. A dollar now fetches about 83 rupees. But minor changes are expected.

Betting increased after leading banks called on clients to take long positions in the rupee against the US dollar, Reuters reported. India, a BRICS member, is gaining the trust of foreign exchange investors who expect the rupee to gain against the US dollar. Offshore banks have advised clients to buy INR-USD trading pairs directly or use put options.

Leading global bank JPMorgan has predicted the future of the US dollar against the Chinese yuan (renminbi), the local currency of BRICS members. BRICS member China is moving to devalue the US dollar and replace the global reserve currency with the Chinese yuan. China is taking a number of steps to keep the renminbi above the US dollar, and their local currency is gaining acceptance for global trade.

China has started the fight to make local currencies better than the US dollar with the dollar de-dollarization initiative. The BRICS bank, commonly called the New Development Bank (NDB), is set to launch new bonds in the global market.

The bonds soon to be issued by BRICS will be called 'Maharaja Bonds made available to governments, financial institutions and ordinary investors'. Interestingly, BRICS bonds will be available for purchase in local currencies, not in US dollars.

BRICS is pushing ahead with its dollar-free initiatives, hampering the prospects of the US dollar. Russia's President Vladimir Putin confirmed earlier this month that more than 20 countries are ready to join BRICS in 2024. South African BRICS Ambassador Anil Sooklal also revealed that more than two dozen countries have expressed interest in joining the bloc.

The latest data reveals that 25 new countries are seeking to become part of the BRICS alliance by 2024. Although the Houthis' offensive in the Red Sea may lead to a slight increase in trade with West Asian countries, the Indian rupee is expected to strengthen, economists say.