Saturday, July 20, 2024

Rupee sees steepest fall

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PNS|Mumbai

The rupee recorded its steepest single-day fall in nearly six months on Wednesday, declining 45 paise to settle at 82.67 against the US dollar amid weak domestic equities and unabated foreign fund outflows.

Rupee was trading in a negative note on risk aversion in global markets and weak Asian currencies. There was also downside pressure on the local unit due to strong dollar against major rivals overseas.

At the interbank foreign exchange, the domestic unit opened at 82.38 against the dollar and touched a peak of 82.37 during intra-day. It finally ended the day at 82.67, registering a fall of 45 paise from its previous close.

This was the biggest single-day fall for rupee in nearly six months. The Indian currency had witnessed the steepest intra-day fall of 68 paise on February 6, when it had settled at 82.76 against the greenback.

On Tuesday, the rupee had settled at 82.22 against the dollar.

“We expect the rupee to trade with a negative bias on risk aversion in global markets and weak Asian currencies.

“Though the US dollar declined on a credit rating downgrade by Fitch, safe-haven demand amid risk aversion in global markets is providing a shield to the greenback,” Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas, said.

According to him, investors may also remain cautious ahead of the Bank of England’s monetary policy. “We expect the USD-INR spot to trade in the range of 82.20 to 83 in the near-term,” he added.

On Wednesday, USDINR gave an upward breakout after hovering near 82.25 for the past three days amid risk-averse sentiments, dollar outflows and higher crude oil prices, Dilip Parmar, Research Analyst, HDFC Securities, said.

The dollar flows and risk moods will drive the forex markets ahead of next week’s RBI’s monetary policy decision.

Broadly, USDINR has been oscillating between 83 to 81.50, since February 2022. “We believe the pair is expected to stay in the said range for a few more days amid the central bank’s intervention on both sides,” Parmar added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.33 per cent to 102.64.

Brent crude futures, the global oil benchmark, declined by 2.27 per cent to USD 82.98 per barrel.

On the domestic equity market front, the 30-share BSE Sensex closed 676.53 points or 1.02 per cent lower at 65,782.78 points. The broader NSE Nifty fell 207.00 points or 1.05 per cent to close at 19,526.55 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 1,877.84 crore, according to exchange data.

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