Finance
On Monday, the rupee fell 65 paise to close at 82.73 (provisional) against the US dollar, weighed down by gains in the greenback in overseas markets and a flat trend in domestic equities.
Foreign fund outflows have continued, and crude oil prices have risen, according to forex traders.
The rupee opened at 82.35 against the US dollar on the interbank foreign exchange market and fell to an intraday low of 82.76. It eventually closed at 82.73 (provisional), down 65 paise from the previous close.
The rupee had previously settled at 82.08 against the US dollar in the previous session on Friday.
The dollar index, which measures the strength of the greenback against a basket of six currencies, was 0.24 percent higher at 103.16, owing to strong economic data from the United States, which raised expectations of a hawkish Federal Reserve.
Brent crude futures rose 0.45% to USD 80.30 per barrel, the global oil benchmark.
According to Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, the Indian rupee depreciated due to a rally in the US dollar and weak domestic markets.
“Dollar gained on robust economic data from the US raising expectations of hawkish Federal Reserve.
“Non-farm payrolls added 517,000 jobs in January topping estimates of 193,000 jobs while ISM services PMI unexpectedly surged to 55.2 in January sharply above estimates of 50.5.
Unemployment rate declined to 3.4 per cent in January compared to forecast of 3.6 per cent.
“We expect the rupee to trade with a negative bias as the rebound in Dollar may further weaken the domestic currency. Weak domestic equities and FII outflows may also put downside pressure on Rupee,” Choudhary said.
However, a weak tone in crude oil prices may prevent the Rupee from falling sharply. Market participants may remain cautious in the run-up to the RBI’s monetary policy announcement on Wednesday.
“There is expectation of a 25-bps rate hike to 6.5 percent, with the USDINR spot price trading in a range of Rs 82 to Rs 83.30,” Choudhary said.
The 30-share BSE Sensex fell 334.98 points, or 0.55 percent, to 60,506.90, while the NSE Nifty fell 89.45 points, or 0.5%, to 17,764.60.
According to exchange data, foreign institutional investors (FIIs) were net sellers in the capital markets on Friday, offloading shares worth Rs 932.44 crore.
Source:FE
