Rupee Falls 2 Paise To Close At 77.57 Versus The Us Dollar
The rupee slipped by 2 paise to close at 77.57 against the US dollar in restricted trade on Tuesday, weighed down by a negative trend in domestic equities and unabated foreign fund outflows. Suspected RBI intervention and the US dollar falling to a month’s low against major global currencies capped the rupee’s losses, analysts said.
At the interbank foreign exchange market, the rupee opened lower at 77.56 against the greenback, and finally settled at 77.57, down 2 paise over its previous close. During the trading session, the rupee touched an intra-day low of 77.67 and a high of 77.51. On Monday, the rupee recovered from record lows and settled 15 paise higher at 77.55 against the US currency.
“The Indian rupee drifted lower after two days of consolidation on the back of the risk-averse sentiment and foreign fund outflows. The rupee has been underperforming among Asian currencies amid a weaker macro environment and foreign fund outflows,” said Dilip Parmar, Research Analyst, HDFC Securities.
While the dollar index has fallen further to the downside and eying the psychological level of 100, the local unit is weakening along with other emerging market currencies on growth and inflation worries. “So far this month, the rupee has been the worst-performing currency among Asian currencies with a loss of 1.6 percent after the RBI joined the global central banks in raising interest rates to curb inflation,” Parmar said.
In the current calendar year, foreign institutional investors sold equities worth USD 21.25 billion and USD 1.82 billion of debt. The near-term outlook for USDINR remains bullish as long as it trades above 76.70, while on the higher side it faces strong resistance in the area of 77.80 to 78, Parmar noted.
“Focus will be on the preliminary manufacturing and services PMI number from the US, Eurozone and the UK. We expect the USDINR to trade sideways and quote in the range of 77.20 and 77.80,” Somaiya said. “We suspect RBI intervention may have kept losses in check for the rupee. Over the near term, USDINR can trade within a range of 77.30 and 77.80 levels on spot,” Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, declined by 0.3 percent to a month’s low of 101.79. Global oil benchmark Brent crude futures fell 0.37 percent to USD 113 per barrel. The 30-share BSE Sensex ended 236 points or 0.43 percent lower at 54,052.61, while the broader NSE Nifty fell 89.55 points or 0.55 percent to 16,125.15.
Foreign institutional investors were net sellers in the capital market on Tuesday, as they offloaded shares worth Rs 2,393.45 crore, as per stock exchange data.
(Edited by : Anand Singha)