Finance
The rupee fell 10 paise to close at 82.31 (provisional) against the US dollar on Monday, as a strong US dollar in the foreign market and firm crude oil prices weighed on investor sentiment.
The rupee opened at 82.44 against the US dollar on the interbank foreign exchange market and closed at 82.31 (provisional), down 10 paise from its previous close of 82.21.
Against the US dollar, the domestic unit reached an intraday high of 82.31 and a low of 82.46 during the session.
Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, was 0.08 percent higher at 102.58.
Brent crude futures rose 5.28 percent to USD 84.11 per barrel, the global oil benchmark.
According to Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, the rupee depreciated on the back of a strong dollar and weak domestic market.
Meanwhile, the decision of OPEC+ to cut crude oil production led to a sharp rise in global crude oil prices, renewing inflation concerns.
“Core PCE (Personal Consumption Expenditures) inflation showed cooling inflation in the US, raising expectations that the US Federal Reserve may be at the end of its rate hike cycle. However, upbeat macroeconomic data cushioned the downside,” Choudhary said.
The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) rose from 55.3 in February to 56.4 in March, signalling the strongest improvement in operating conditions in 2023 so far.
“We expect Indian rupee to trade with a negative bias on a strong dollar and surge in crude oil prices. This may impact global economic recovery,” Choudhary said.
Investors are likely to remain cautious ahead of the RBI’s monetary policy decision and a report on the US labor market later this week.
The RBI’s rate-setting panel began its three-day meeting on Monday amid expectations that the central bank will hike the benchmark interest rate by 25 basis points, likely the last in the current monetary tightening cycle that began in May 2022.
The 30-share BSE Sensex closed 114.92 points, or 0.19 percent, higher at 59,106.44 points, while the NSE Nifty advanced 38.30 points, or 0.22 percent, to 17,398.05 points.
According to exchange data, Foreign Institutional Investors (FIIs) were net buyers in the capital market on Friday, purchasing shares worth Rs 357.86 crore.
Source:FE
