Finance
The Indian rupee rose on Monday, halting a four-day losing skid, but it remained in a limited range due to importer demand and rising fears about rising crude oil costs. The rupee finished the day at 82.74 per dollar, up 0.12%.
On Friday, the local currency closed at 82.84. However, concerns about rising crude prices and demand from importers, notably oil corporations, restrained the rupee from strengthening more, according to traders. “Anything beyond $83 per barrel on crude oil, and the rupee will be watching closely,” said Sajal Gupta, head of forex and rates at Edelweiss Financial Services. In the upcoming days, the rupee is likely to trade in the 82.50-82.80 range, Gupta added.
After Saudi Arabia and Russia committed to extend supply cutbacks through September, oil prices have remained near their highest levels since mid-April. According to a forex dealer at a private bank, the rupee is unlikely to fall above the 83 mark this week.
“Overall, oil prices are the biggest tail risk for the rupee market right now,” said Arnob Biswas, head of FX research at SMC Global Securities. Additionally, Biswas expects the rupee to be range-bound between 82.40 to 82.85 over the next few days. The tone of the Reserve Bank of India’s (RBI) policy decision on Thursday will be a key monitor for its hawkishness. It is widely anticipated that the central bank will hold rates steady.
“We do see one more 25 bps hike in CY23 as CPI inflation is still away from the 4% target,” Bank of America noted in a note. U.S. consumer price inflation numbers will also be released on Thursday, and a softer-than-expected reading may further curtail chances of another rate hike by the U.S. Federal Reserve.
Source:FE
