Rupee falls 5 paise to end at 79.90 against dollar
PTI, Jul 22, 2022, 8:17 PM IST
Representational Image by shutterstock
Mumbai: The rupee fell by 5 paise to close at 79.90 against the US dollar on Friday as stronger American currency and elevated crude oil prices weighed on investor sentiment.
However, a firm trend in domestic equities restricted the rupee’s fall, forex traders said.
At the interbank forex market, the local unit opened lower against the greenback and finally settled at 79.90, registering a fall of 5 paise from its previous close.
During the day, the local unit witnessed an intra-day high of 79.86 and a low of 79.92 against the American currency.
On Thursday, the rupee recovered from its all-time low of 80.06 to close 20 paise higher at 79.85 against the US dollar following overall weakness in crude oil prices and fresh foreign fund inflows.
The dollar index, which measures the greenback’s strength against a basket of six currencies, was up 0.20 per cent at 107.12.
Brent crude futures, the global oil benchmark, fell 0.56 per cent to USD 103.28 per barrel.
“Surge in domestic markets, FII inflows and softening crude oil prices supported the Rupee. However, a positive Dollar capped sharp gains,” Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
The dollar gained Friday on improved safe-haven appeal amid concerns over the recession and disappointing PMI data from Europe.
“We expect the Rupee to trade on a mixed to negative note on a strong Dollar and concerns over inflation and rising twin deficits. The dollar is also expected to recover from lower levels ahead of the Federal Open Market Committee (FOMC) meeting next week wherein, the Fed is expected to hike rates aggressively,” Choudhary said.
On the domestic equity market front, the BSE Sensex ended 390.28 points or 0.70 per cent higher at 56,072.23, while the broader NSE Nifty advanced 114.20 points or 0.69 per cent to 16,719.45.
Foreign institutional investors were net sellers in the capital market on Friday as they sold shares worth Rs 675.45 crore, as per exchange data.
According to Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, the rupee consolidated in a narrow range after the ECB raised its benchmark deposit rate by 50 bps.
“The Euro rose after reports of the ECB rate decision. The ECB President said a clear deterioration of the inflation outlook and unanimous backing for the anti-fragmentation instrument justified the bigger move. Euro fell after preliminary manufacturing PMI came below estimates,” Somaiya said.
Somaiya further added that “we expect the USD/INR (spot) to trade with a positive bias and quote in the range of 79.70 and 80.20 in the short-term”.
“Rupee traded range bound hovering around the 80.00 mark the whole week against the dollar as the dollar index traded between a range between 106-109,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
All eyes are on the US Fed statement and policy next week for further cues and direction. Rupee range till then can be seen between 79.75-80.20,” Trivedi added.
Reserve Bank Governor Shaktikanta Das on Friday said the rupee is holding up relatively well when compared to the currencies of emerging market peers and advanced economies.
Das also said that by eschewing sudden and volatile shifts, the central bank has ensured that expectations remain anchored and the forex market functions in a stable and liquid manner.
He also noted that the central bank will continue to engage with the forex market and ensure that the rupee finds its level in line with its fundamentals.
“After all, this is the very purpose for which we had accumulated reserves when the capital inflows were strong. And, may I add, you buy an umbrella to use when it rains!” Das said.
The country’s foreign exchange reserves had declined by USD 8.062 billion to USD 580.252 billion in the week ended July 8.
Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.
Top News
Related Articles More
Reverse migration has begun, says FM Nirmala Sitharaman
Markets sustain winning streak — Sensex jumps over 560 points, Nifty tops 22,300-level
Sensex climbs 640 points, Nifty tops 22,300-level in early trade
Insurance regulator IRDAI abolishes age restriction on health insurance product
Elon Musk says India visit delayed due to Tesla obligations
MUST WATCH
Latest Additions
UGC warns against ’10-day MBA’ programme, misleading abbreviations for degree nomenclature
Modi will go to jail if electoral bonds ‘scandal’ is investigated: M B Patil
Delhi police detains shopkeeper over biryani served on plate with Lord Ram image, releases him later
Delhi court extends judicial custody of Kejriwal, K Kavitha in excise policy case till May 7
Former Punjab Congress MLA Angad Saini injured in road accident in Balachaur