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Tag: US dollar

  • Gold Hits Record $5K While Bitcoin Struggles To Keep Pace

    Gold shone brightly today, racing to a new high while crypto took the back seat, and the gap between the two assets opened wide.

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    On Monday, the precious metal moved past the $5,000 mark, registering a price point market sentinels had not witnessed before. Bitcoin, by contrast, failed to keep pace and traded well below its recent highs.

    Gold Hits Record Levels

    Safe-haven demand pushed gold sharply higher. Prices were up above $5k an ounce and inked roughly $5,110 at the peak. Silver, for its part, did not go unnoticed, jumping to fresh peaks near $107/ounce.

    Source: Gold Price

    Traders pointed to simmering geopolitical friction and talk of tougher trade moves led by US President Donald Trump as fuel for the rally.

    A weaker greenback made metals more attractive to customers overseas, and central bank buying provided steady backing. Liquidity in some corners were thin as investors rushed to shift cash into things that feel stable when risk elevates.

    Bitcoin Falls Behind

    Market numbers show Bitcoin hovering in the mid-$80,000s range, retreating from peaks seen late last year. Reports note the alpha crypto is roughly 30% below the highest level it hit reached in October 2025, leaving some holders quite jittery.

    Volatility was another factor. Where bullion is being sought for safety, Bitcoin is viewed more as a growth or speculative play, and that difference in investor application becomes clear when markets tighten. Some funds slashed their crypto exposure, signaling a short reroute away from high-risk gambits.

    BTCUSD currently trading at $87,832. Chart: TradingView

    Why Investors Are Shifting

    Analysts and traders described a simple choice: shelter or swing for gains. When headlines push worry, money flows into assets that are widely trusted across markets and governments.

    Metals fit that ticket. Based on market chatter, fears of a US government funding clash and fresh tariff announcements stacked pressure on stocks and added a sense of urgency to safe-haven acquisition.

    Options and futures trading hinted at a more cautious perpective, with volatility indexes rising and bond yields behaving in ways that made the yellow metal look more appealing by comparison.

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    What Traders Are Watching

    Market watchers said eyes will be glued on a few key metrics: The dollar’s path, moves by major central banks, and any sign that US politics escalates could keep metals elevated.

    For Bitcoin, network activity, large wallet flows, and regulatory headlines will likely set the tone. Some traders expect swings both ways. Others caution that when risk appetite is back, crypto may bounce hard, but that outcome is not a sure thing and will be dependent on a string of policy and macro moves.

    Featured image from Unsplash, chart from TradingView

    Christian Encila

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  • Vegas Casinos Accept Canadian Dollars as US • This Week in Gambling

    A group of prominent downtown Vegas casinos has announced a new initiative to accept the Canadian dollar at par with the American dollar. The promotion, which began this week and is scheduled to run through August 31, 2026, aims to reverse a sharp decline in international tourism from the north.

    The three participating properties are Circa Resort and Casino, The D Las Vegas, and Golden Gate Hotel and Casino. Under the new At Par program, eligible Canadian visitors will receive one U.S. dollar in value for every one Canadian dollar spent on specific services. This move effectively removes the current exchange rate barrier, which has seen the Canadian dollar trading at significantly lower values than its U.S. counterpart.

    According to Derek Stevens, CEO of the three Vegas casinos, the decision was driven by data showing a major drop in Canadian visitation over the past year. Industry reports indicate that Canadian travel to the city fell by approximately 20 percent in 2025, while airline seat capacity from Canada to Nevada decreased by roughly 30 percent. Stevens, who has personal ties to Canada, stated that the goal is to eliminate conversion stress and welcome back a demographic that has historically been the top international market for the region.

    The program includes several components. Canadian guests staying at these properties will pay for their room rates in Canadian dollars at a one-to-one ratio at check-in. The offer also extends to beverage purchases at designated locations, including BarCanada at The D, Overhang at Circa, and Bar Prohibition at Golden Gate. Additionally, the casinos are offering a gaming incentive where Canadian players can redeem up to 500 dollars in Canadian currency for 500 dollars in slot promotional play.

    To participate, guests must present a valid Canadian passport or government-issued identification to verify citizenship. The promotion is available to all Canadian travelers, regardless of whether they are staying at the participating hotels. Officials hope the financial advantage provided by the fixed exchange rate will encourage travelers to return during the busy summer season. As the tourism industry monitors cross-border travel trends, these Vegas casinos are positioning themselves as high-value destinations for international neighbors facing unfavorable currency markets.

    This Week in Gambling

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  • ETFs are on pace to break record annual inflows, but this wild card could change it all

    ETFs are on pace to break record annual inflows, but this wild card could change it all

    Exchange-traded fund inflows have already topped monthly records in 2024, and managers think inflows could see an impact from the money market fund boom before year-end.

    “With that $6 trillion plus parked in money market funds, I do think that is really the biggest wild card for the remainder of the year,” Nate Geraci, president of The ETF Store, told CNBC’s “ETF Edge” this week. “Whether it be flows into REIT ETFs or just the broader ETF market, that’s going to be a real potential catalyst here to watch.”

    Total assets in money market funds set a new high of $6.24 trillion this past week, according to the Investment Company Institute. Assets have hit peak levels this year as investors wait for a Federal Reserve rate cut.

    “If that yield comes down, the return on money market funds should come down as well,” said State Street Global Advisors’ Matt Bartolini in the same interview. “So as rates fall, we should expect to see some of that capital that has been on the sidelines in cash when cash was sort of cool again, start to go back into the marketplace.”

    Bartolini, the firm’s head of SPDR Americas Research, sees that money moving into stocks, other higher-yielding areas of the fixed income marketplace and parts of the ETF market.

    “I think one of the areas that I think is probably going to pick up a little bit more is around gold ETFs,” Bartolini added. “They’ve had about 2.2 billion of inflows the last three months, really strong close last year. So I think the future is still bright for the overall industry.”

    Meanwhile, Geraci expects large, megacap ETFs to benefit. He also thinks the transition could be promising for ETF inflow levels as they approach 2021 records of $909 billion.

    “Assuming stocks don’t experience a massive pullback, I think investors will continue to allocate here, and ETF inflows can break that record,” he said.

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  • RBC Capital Markets: Market pricing of RBA rate cuts “totally misplaced”

    RBC Capital Markets: Market pricing of RBA rate cuts “totally misplaced”

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    Alvin Tan, Head of Asia FX Strategy at RBC Capital Markets cites elevated inflation rates and slowing growth in Australia as proof that the easing path of the RBA will be more gradual, with rate cuts starting next year. Additionally, he examines the BOJ’s policy normalization path, saying that a rate hike would help to strengthen the yen in the long-term, but it would not be a “smooth ride” higher.

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  • Case for gold fever: NewEdge Wealth sees record rush intensifying

    Case for gold fever: NewEdge Wealth sees record rush intensifying

    The record gold rush may intensify into year-end.

    According to NewEdge Wealth’s Ben Emons, the final month of the year typically creates a bigger appetite for the yellow metal.

    “It’s been very consistent every December. It’s been a pretty strong performance for gold — especially when there is a rally in the stock market in November,” the firm’s head of fixed income told CNBC’s “Fast Money” on Tuesday.

    Gold settled at a new record high Friday. It closed the day up almost 2%, at $2,089.70 an ounce.

    Emons listed the economic backdrop and geopolitical backdrop as additional positive catalysts for gold.

    “There’s uncertainty next year. We have an election. We don’t know what’s going to happen. We get a recession maybe, maybe not,” said Emons. “At the same time, gold rallies when there’s this risk-on feel in the markets, and that’s really when real rates and interest rates are declining. This gives the gold a really good push for the breakout.”

    In a note to clients this week, Emons wrote that months for both gold and stocks are a “rare combo.” Gold gained 3% while the Dow and S&P 500 were both up almost 9% in November.

    “[It] tends to occur when markets price in major easing cycles,” he wrote. “Currently, that is going on in a mild manner, which puts the spotlight on the seasonals of gold.”

    Emons suggests the strength will continue into next year.

    “Central banks are again outbidding gold against dwindling supply, likely setting up the metal for a major breakthrough towards 2100 … lifting boats for laggards like utilities have a shot to claim market leadership by early 2024,” Emons also wrote.

    “Fast Money” trader Guy Adami also sees gold shining due to the dollar‘s recent performance.

    “If rates continue to go lower, the dollar will go lower. That will be a tailwind for gold,” he said. “Gold is within a whisper of having a huge breakout to the upside.”

    As of Friday’s close, gold is up more than 14% so far this year.

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  • Why substituting cryptocurrency for gold exposure may be a costly mistake

    Why substituting cryptocurrency for gold exposure may be a costly mistake

    Viewing cryptocurrency as “digital gold” may be a mistake.

    State Street Global Advisors’ George Milling-Stanley, whose firm runs the world’s largest gold exchange-traded fund, believes cryptocurrency is no substitute for the real thing due its vulnerability to big losses.

    “Volatility does not back up any claims for crypto to be a long-term strategic asset as a competitor to gold,” the firm’s chief gold strategist told CNBC’s “ETF Edge” earlier this week.

    Milling-Stanley’s firm is behind SPDR Gold Shares, the world’s largest physically backed gold ETF. It has a total asset value of more than $57 billion as of last week, according to the company’s website. The ETF is up 7% year to date as of Friday’s market close.

    Milling-Stanley believes gold’s 6,000-year history as a monetary asset serves as a significant sample basis to understand the benefits of investing in gold.

    “Gold is a hedge against inflation. Gold’s a hedge against potential weakness in the equity market. Gold’s a hedge against potential weakness in the dollar,” he noted. “To me, historically, the promise of gold for investors has … overtime [helped] to enhance the returns of a properly balanced portfolio.”

    The precious metal is having trouble this year staying above the $2,000 an ounce mark. But Milling-Stanley believes the economic backdrop bodes well for gold — recession or not.

    “It’s pretty clear that we’re liable to be in a period of slow growth. … Historically, gold has always done well during periods of slower growth,” Milling-Stanley said.

    Milling-Stanley also believes the relaxation of Covid-19 restrictions in China should spark more demand for gold. It’s known as the world’s largest consumer of gold jewelry behind India, according to the World Gold Council.

    “It’s not just China and India. It’s Vietnam, it’s Indonesia, it’s Thailand and Korea. It’s a whole raft of Asian countries that are really the main drivers of gold jewelry demand,” Milling-Stanley said.

    Gold settled at $1,960.47 an ounce Friday. The commodity is up more than 7% so far this year.

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  • A.I. trade is leaving investors vulnerable to painful losses: Evercore

    A.I. trade is leaving investors vulnerable to painful losses: Evercore

    The artificial intelligence trade may be leaving investors vulnerable to significant losses.

    Evercore ISI’s Julian Emanuel warns Big Tech concentration in the S&P 500 is at extreme levels.

    “The AI revolution is likely quite real, quite significant. But… these things unfold in waves. And, you get a little too much enthusiasm and the stocks sell off,” the firm’s senior managing director told CNBC’s “Fast Money” on Monday.

    In a research note out this week, Emanuel listed Microsoft, Apple, Amazon, Nvidia and Alphabet as concerns due to clustering in the names.

    “Two-thirds [of the S&P 500 are] driven by those top five names,” he told host Melissa Lee. “The public continues to be disproportionately exposed.”

    Emanuel reflected on “odd conversations” he had over the past several days with people viewing Big Tech stocks as hiding places.

    “[They] actually look at T-bills and wonder whether they’re safe. [They] look at bank deposits over $250,000 and wonder whether they’re safe and are putting money into the top five large-cap tech names,” said Emanuel. “It’s extraordinary.”

    It’s particularly concerning because the bullish activity comes as small caps are getting slammed, according to Emanuel. The Russell 2000, which has exposure to regional bank pressures, is trading closer to the October low.

    For protection against losses, Emanuel is overweight cash. He finds yields at 5% attractive and plans to put the money to work during the next market downturn. Emanuel believes it will be sparked by debt ceiling chaos and a troubled economy over the next few months.

    “You want to stay in the more defensive sectors. Interestingly enough with all of this AI talk, health care and consumer staples have outperformed since April 1,” Emanuel said. “They’re going to continue outperforming.”

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  • Major Wall Street firm sees a breakout in luxury stocks — and lists three reasons why ETFs are a great way to play it

    Major Wall Street firm sees a breakout in luxury stocks — and lists three reasons why ETFs are a great way to play it

    As luxury stocks make waves overseas, State Street Global Advisors believes investors should consider European ETFs if they want to capture the gains from their outperformance.

    Matt Bartolini, the firm’s head of SPDR Americas research, finds three reasons why the backdrop is becoming particularly attractive. First and second on his list: valuations and earnings upgrades.

    “That’s completely different than what we saw for U.S. firms,” he told CNBC’s Bob Pisani on “ETF Edge” this week.

    His remarks come as LVMH became the first European company to surpass $500 billion in market value earlier this week.

    Bartolini lists price momentum as a third driver of the investor shift.

    His SPDR Euro Stoxx 50 ETF (FEZ) is considered a broad European ETF. The ETF is up about 20% so far this year, with a price increase of nearly 1.2% since the beginning of January.

    While the fund’s top holding is LVMH at 7.29%, according to the company’s website, Bartolini contends the shift applies beyond luxury stocks and to lower-end consumer stocks.

    His firm’s website lists French cosmetics company L’Oreal — which is up almost 30% this year — as another one of his fund’s major holdings. It also shows FEZ allocating more than 20% to consumer discretionary — 2.5% higher than its second-most allocated industry.

    “That’s on a broad-based level,” he said. “So, basically, buy Europe and sell U.S. has been some of the trade that we have seen.”

    FEZ closed the week down 0.41% but ended the month up more than 3.1%.

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  • BofA reports inflows into global stocks are on a record-setting pace — and ETFs may be a way to play the hot trade

    BofA reports inflows into global stocks are on a record-setting pace — and ETFs may be a way to play the hot trade

    There’s a corner of the market gaining traction among ETF investors, according to The ETF Store’s Nate Geraci.

    The firm’s president finds international ETFs are experiencing stronger inflows.

    “There is a little bit of performance chasing going on here, because broad international stocks have fairly significantly outperformed U.S. stocks since about the beginning of the fourth quarter of last year,” he told CNBC’s “ETF Edge” this week. “Investors are looking at that performance and perhaps reallocating there.”

    BofA Global Research’s latest market data out late this week appears to support Geraci’s thesis. It shows emerging markets are seeing strong inflows so far this year.

    According to the firm, inflows into emerging-market equities are clipping along at $152.3 billion on an annualized basis. This would mark the group’s largest ever inflows if the pace continues.

    Geraci believes a weakening U.S. dollar due to a potential pivot away from interest rate hikes by the Federal Reserve is partially responsible for the shift. The U.S. Dollar Currency Index is down almost 1% year to date.

    Valuations of overseas companies may also be more attracting investors, he added.

    And, there may be even more growth ahead.

    D.J. Tierney of Schwab Asset Management contends retail investors don’t own enough global stocks. He suggests the upside will continue into the second quarter, which starts Monday.

    “Rebalancing [to international stocks] to get some more exposure could make sense for a lot of investors,” said the senior investment portfolio strategist.

    His firm’s Schwab International Equity ETF, which tracks large- and mid-cap companies in over 20 developed global markets, is up 8.1% so far this year.

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  • India should allow gradual rupee weakening, use fx reserves ‘judiciously’ – govt adviser

    India should allow gradual rupee weakening, use fx reserves ‘judiciously’ – govt adviser

     India’s central bank should allow rupee to depreciate gradually and use foreign exchange reserves judiciously, the government’s chief economic adviser V. Anantha Nageswaran on Monday.

    Nageswaran comment on the rupee and foreign exchange reserves is the first official government comment since concerns about dwindling currency reserves emerged earlier this year.

    India’s foreign currency reserves have fallen from a peak of $642 billion to $531 billion partly due to dollar sales to support the rupee.

    “We should in the short-run allow the rupee to depreciate gradually and we should use forex exchange reserves judiciously,” Nageswaran said at an online event.

    With the economy likely to run a current account deficit of close to 3% of gross domestic product in the current financial year, analysts expect reserves to fall further.

    “We should augment foreign exchange reserves and that will help with any contingencies,” he added.

    He said the country currently had adequate reserves to deal with capital outflows.

    Financing India’s trade deficit would be the main challenge for the year even as there are signs of broader economic recovery, Nageswaran said.

    He said he expected growth to moderate to around 6.5% to 7% in the current fiscal year that started on April 1. The government in January had projected economic growth of 8% to 8.5% for the current fiscal year but since then most agencies including the Reserve Bank of India have cut their annual growth estimateS to around 7%.

    Nageswaran also said some central banks, including the Bank of Canada, European Central Bank, and the Reserve Bank of Australia, had indicated a less aggressive monetary policy that would help emerging nations.
     

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  • US stocks dip, dollar up as China sticks to pandemic policy

    US stocks dip, dollar up as China sticks to pandemic policy

    US stock futures slipped in Asia on Monday after Beijing denied it was considering easing its zero COVID-19 policy, helping the dollar recover some losses while dealing a setback to oil and commodities.

    Risk assets had rallied on Friday amid speculation China was preparing to relax its pandemic restrictions, but over the weekend health officials reiterated their commitment to the “dynamic-clearing” approach to COVID cases as soon as they emerge. 

    “Despite the denial, notions that China will pivot to living with COVID in the new year are unlikely to be quashed given the very real toll that zero-COVID is having on the economy,” said Tapas Strickland, head of market economics at NAB.

    “With China going into winter, most analysts think a change in zero-COVID is unlikely until at least March.”

    Speculation that China might open its economy saw copper jump 7% on Friday in its biggest one-day rally since 2009, while a range of resources all benefited from hopes of increased demand. 

    It also sent the yuan surging and triggered a round of profit taking on long US dollar positions, particularly against commodity sensitive currencies such as the Australian dollar.

    Some of that reversed early Monday, with the Aussie down 0.8% at $0.6414 AUD-D3 after jumping 3% on Friday. The dollar gained 0.6% on the offshore yuan.

    The US dollar index bounced 0.4% having dived almost 2% at the end of last week. The dollar edged back up to 147.00 yen, while the euro eased 0.4% to $0.9920. 

    S&P 500 futures ESc1 turned tail and fell 0.7%, while Nasdaq futures NQc1 lost 0.8%. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.4%.

    Aiding risk sentiment at the margin were reports the White House is privately encouraging Ukraine to signal an openness to negotiate with Russia. 

    Dealers were still digesting a mixed U.S jobs report which showed solid gains in the payrolls survey but softness in the less reliable household survey of unemployment. 

    Four Federal Reserve policymakers on Friday indicated they would still consider a smaller interest rate hike at their next policy meeting, sounding less hawkish than Chair Jerome Powell. 

    There are at least seven Fed officials scheduled to speak this week, which will help refine the rate outlook with markets now narrowly leaning toward a half-point rate hike next month to 4.25-4.5%.

    “We maintain the Fed will see sufficient progress on inflation to pause at 4.75% in February, but the risks are skewed to more hikes that likely bring about a recession sometime later in 2023 or early 2024,” said Bruce Kasman, head of economic research at JPMorgan.

    Short-term Treasuries managed a minor rally on Friday with two-year yields edging back to 4.66% and off highs not seen since 2007.

    The market faces a major hurdle on Thursday when US consumer prices for October are released, with any upside surprise set to test hopes for a step down in Fed hikes.

    Median forecasts are for annual CPI inflation to slow to 8.0% and for the core to dip a tick to 6.5%.

    Also of note will be midterm US elections on Tuesday where Republicans could win control of one or both chambers and lead to deadlock on fiscal policy.

    In commodity markets, gold eased back to $1,677 an ounce after jumping over 3% on Friday. 

    Oil futures lost some of their gains with Brent LCOc1 off $1.79 at $96.78, while US crude CLc1 dropped $1.71 to $90.90 per barrel.

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  • ‘Rupee is not sliding, dollar is strengthening,’ says FM Nirmala Sitharaman

    ‘Rupee is not sliding, dollar is strengthening,’ says FM Nirmala Sitharaman

    Finance minister Nirmala Sitharaman, who has been speaking about India’s growth story and robust economy during her recent interactions, has said that in the current scenario, the Indian the rupee is not sliding, but the US dollar strengthening.  Replying to a question, Sitharaman said: “Dollar is strengthening incessantly. So obviously, all other currencies are performing against the strengthening dollar. I am not talking about technicalities but it is a matter of fact India’s rupee probably has withstood this dollar rate going up…I think the Indian rupee has performed much better than many other emerging market currencies.” 

    She said that the Reserve Bank of India (RBI) was focused on ensuring that there isn’t too much volatility and was not intervening in the market to fix the value of the Indian currency. 

    Responding to questions asked by news agency ANI on measures being taken to tackle the slide, she said: “The efforts of RBI are more towards seeing that there is not too much volatility, it is not to intervene in the market to fix the value of the rupee. Containing the volatility is the only exercise RBI is involved in and I have said this before that rupee will find its level,” she said. 

    The depreciation of the rupee is a cause of concern, especially for a country that has significant imports, as per experts. On Friday, the rupee closed at 82.19 against the US dollar amid a firm greenback overseas and sliding crude oil prices. 

    At the interbank foreign exchange market, the local currency opened at 82.26 and witnessed a high of 82.12 and a low of 82.43 before settling at 82.19. The dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.56 per cent to 112.99. 

    As per experts, the latest round of depreciation is due to adverse global developments starting with the geopolitical tensions triggered by the Russian-Ukraine war. The war pushed up commodity prices, leading to a record surge in inflation in the developed world, which has resulted in steep rate hikes by the US Fed. This has resulted in a flight of capital back to the US, hence resulting in currency depreciation episodes. 

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  • IMF warns central banks against taking this one step as they fight strong US dollar

    IMF warns central banks against taking this one step as they fight strong US dollar

    The International Monetary Fund (IMF) on Friday put out a detailed note suggesting ways the countries can respond to a strong US dollar, which has weakened other currencies significantly, including the rupee. The Indian rupee has fallen over 8% since January this year and is currently trading at over 82 per dollar. 

    Currently, the dollar is at its highest level since 2000, having appreciated 22% against the yen, 13% against the Euro, and 6% against emerging market currencies since the start of this year. The spike in the dollar began after America’s central bank – Federal Reserve – started raising the interest rate in order to fight super hot inflation in the US. 

    In a blog post, IMF’s Gita Gopinath and Pierre-Olivier Gourinchas said that a sharp strengthening of the dollar in a matter of months has sizable macroeconomic implications for almost all countries, given the dominance of the dollar in international trade and finance.

    While the US share in world merchandise exports has declined from 12% to 8% since 2000, the post said, the dollar’s share in world exports has held around 40%. For many countries fighting to bring down inflation, they said, the weakening of their currencies relative to the dollar has made the fight harder. 

    They noted that approximately half of all cross-border loans and international debt securities are denominated in US dollars and as world interest rates rise, the financial conditions have tightened considerably for many countries.

    In these circumstances, the paper said, several countries are resorting to foreign exchange interventions. Total foreign reserves held by emerging markets and developing economies fell by more than 6% in the first seven months of this year.

    The IMF said that the appropriate policy response to depreciation pressures requires a focus on the drivers of the exchange rate change and on signs of market disruptions. “Specifically, foreign exchange intervention should not substitute for warranted adjustment to macroeconomic policies,” the agency said, adding that there is a role for intervening on a temporary basis when currency movements substantially raise financial stability risks and disrupt the central bank’s ability to maintain price stability.

    As of now, it said, economic fundamentals are a major factor in the appreciation of the dollar: rapidly rising US interest rates and a more favorable terms-of-trade — a measure of prices for a country’s exports relative to its imports — for America caused by the energy crisis. It further said that given the significant role of fundamental drivers, the appropriate response is to allow the exchange rate to adjust while using monetary policy to keep inflation close to its target. 

    “The higher price of imported goods will help bring about the necessary adjustment to the fundamental shocks as it reduces imports, which in turn helps with reducing the buildup of external debt. Fiscal policy should be used to support the most vulnerable without jeopardizing inflation goals,” the paper underlined.

    The IMF has advised the countries to use their foreign reserves prudently. It said emerging market central banks have stockpiled dollar reserves in recent years but these buffers are limited and should be used prudently. “Countries must preserve vital foreign reserves to deal with potentially worse outflows and turmoil in the future,” the paper warned.  

    In the past few months, many countries have tried to arrest the decline in their currency by selling dollars. India’s central bank, too, has sold over 110 billion dollars in the last 13 months. India’s forex reserves have now plummeted to 532 billion dollars from the record high of 642.45 billion registered on September 3, 2021.     
     
    Gopinath is the Deputy Managing Director of the IMF and Gourinchas is the Economic Counsellor and the Director of Research. 
          
     

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  • Indian rupee’s depreciation essentially due to strengthening of dollar index: SBI chairman

    Indian rupee’s depreciation essentially due to strengthening of dollar index: SBI chairman

    The Indian rupee has weakened essentially due to the strengthening of the dollar index but it is holding well as compared to currencies of other emerging market economies, State Bank of India Chairman Dinesh Khara said.

    Depreciation of the rupee is a cause of concern, especially for a country that has significant imports, Khara told PTI in an interview on the sidelines of the annual meeting of the International Monetary Fund and the World Bank here on Friday.

    The rupee closed at 82.19 against the US dollar on Friday amid a firm greenback overseas and sliding crude oil prices.

    At the interbank foreign exchange market, the local currency opened at 82.26 and witnessed a high of 82.12 and a low of 82.43 before settling at 82.19.

    The dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.56 per cent to 112.99.

    The Indian rupee is doing pretty well, Khara said.

    “Better than us was only Indonesia, which is generally a commodity economy and Brazil. So, these are the only two currencies which did better than us,” he said.

    “It is essentially the strengthening of the dollar index… which is the cause of the weakness that we have seen in the rupee,” he said.

    “I would say that the (Indian) currency has not behaved as volatile as perhaps the rest of the global currencies,” he added.

    Khara said even though the rupee is holding ground, its depreciation is a cause of concern.

    “It is very much a cause of concern, particularly for an economy which has got significant imports. But… when the dollar is struggling, how much can the rupee hold? Still, I think in the given situation and circumstances, the rupee is holding well,” he said.

    Referring to the interventions by the Reserve Bank of India, he said they are ways to check volatility.

    “Typically speaking, financial markets don’t really appreciate the volatility. It is also one of the functions (of the RBI) to ensure orderly movement of the currency,” he said.

    “To that extent, it is more or less holding its value. But in the larger interests, perhaps some kind of interventions are required. And that is being done,” he said.

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