Finance
In early trade on Thursday, the rupee fell 30 paise to 77.55 against the US dollar, as a lacklustre trend in domestic equity markets and a firm US currency weighed on investor sentiment.
Furthermore, forex traders reported that persistent foreign fund outflows and high crude oil prices weighed on the domestic currency.
At the interbank foreign exchange, the rupee opened sharply lower at 77.52 against the US dollar, then fell further to 77.55, a 30 paise drop from the previous close. The domestic currency was trading between 77.50 and 77.57 in early trades.
The rupee had settled at 77.25 against the US dollar in the previous session.
The dollar index, which measures the strength of the US currency against a basket of six currencies, was 0.10 percent higher at 103.95.
The 30-share Sensex was trading 822.94 points, or 1.52 percent, lower at 53,265.45, while the broader NSE Nifty was down 239.30 points, or 1.48 percent, at 15,927.80.
Brent crude futures fell 1.11 percent to USD 106.32 per barrel, the global oil benchmark.
According to sources, the Reserve Bank is likely to raise inflation projections at its next Monetary Policy Committee (MPC) meeting and consider a rate hike to tame inflation that is above its comfort level.
The MPC, chaired by the RBI Governor, will meet between June 6 and June 8. It has been mandated to keep retail inflation between 2 and 6%.
Morgan Stanley cut its India growth forecast for 2022-23 and 2023-24 by 30 basis points due to global headwinds, and warned that macro stability indicators such as inflation are likely to “worsen” in the coming years.
According to sources, policy rate hikes by major central banks, including the RBI, will have a negative impact on demand in the next 6-8 months, slowing the recovery process.
Several central banks, including the US Federal Reserve and the Bank of England, have raised their benchmark lending rates to combat inflation, which has been exacerbated by the Russia-Ukraine conflict.
According to stock exchange data, foreign institutional investors continued to be net sellers in the capital market on Wednesday, offloading shares worth Rs 3,609.35 crore.
Source:TT
