Finance
The rupee slipped 29 paise to settle at 82.68 (provisional) against the US dollar on Monday, driven down by the American currency’s resilience in the foreign market.
The local unit opened at 82.47 against the dollar on the interbank foreign exchange and eventually finished at 82.68 (provisional), down 29 paise from its previous closing.
Against the US dollar, the rupee reached a high of 82.45 and a low of 82.68 throughout the day. The rupee had finished at 82.39 per dollar on Friday.
The dollar index, which measures the strength of the US currency against a basket of six currencies, increased 0.24 percent to 104.26. Brent crude futures rose 1.62 percent to USD 77.36 a barrel, the global oil benchmark.
According to Dilip Parmar, Research Analyst at HDFC Securities, the rupee had its worst day since March 14 due to weaker regional currencies following a jump in the US dollar fueled by positive US job statistics.
The RBI’s interest rate freeze is also expected to weigh on the rupee, since a narrow interest rate disparity disincentivizes investors, according to Parmar.
Crude oil prices recovered from a multi-month low after Saudi Arabia committed a production cut at the OPEC+ conference, boosting dollar demand from oil importers.
Short-term volatility is expected to spike ahead of this week’s RBI meeting. “Spot USD/INR has strong support at 82.22 (100-day simple moving average) and resistance at 82.95, the current year high,” said Parmar.
The 30-share BSE Sensex closed 240.36 points, or 0.38 percent higher, at 62,787.47 points in the domestic equities market. The NSE Nifty rose 59.75 points, or 0.32 percent, to 18,593.85 points.
According to exchange data, foreign institutional investors (FIIs) were net sellers in the capital markets on Friday, offloading shares worth Rs 658.88 crore.
Meanwhile, India’s foreign reserves fell by USD 4.339 billion to USD 589.138 billion in the week ending May 26, according to the Reserve Bank of India on Friday. The reserves had fallen by USD 6.052 billion in the previous week to USD 593.477 billion.
Source:FE
