Indian rupee drops against UAE dirham in early trade

The Indian rupee depreciated 20 paise to 82.45 against the US dollar (22.45 versus the UAE dirham) in early trade on Thursday, weighed down by strength of the American currency in the overseas market and elevated crude oil prices.

At the interbank foreign exchange, the domestic unit opened at 82.36, then fell to 82.45, registering a decline of 20 paise over its last close. On Wednesday, the rupee settled at 82.25 against the dollar.

Despite the Reserve Bank of India (RBI) concluding a relatively modest cycle of interest rate hikes much earlier than many other central banks, the Indian rupee has witnessed an appreciation of almost 1% throughout the year, driven by significant inflows of foreign capital amidst an improving economic landscape.

Asia's third-largest economy was expected to grow 6.1% this fiscal year, a separate Reuters poll showed, making it the fastest-growing large economy in the world.

Around two-thirds of analysts polled expected the rupee to be at 82.00/dollar or weaker in one month, and none saw it going past the 81.50 mark.

More than 70% of analysts, 27 of 37, forecast the currency will change hands at 82.00/dollar or stronger in 12 months. Only two expected it to strengthen below 80.00/dollar.

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