Rupee rises 15 paise to close at 81.83 against US dollar
the rupee It rose by 15 pounds to close at 81.83 (tentative) against the US dollar on Monday, as a sharp jump in India’s foreign exchange reserves boosted investor sentiment.
In the interbank foreign exchange market, the domestic unit opened at 82 against the US dollar and moved in a range of 81.82 to 82.04 in daily trade.
The rupee closed up 15 paisa at 81.83 (temporary) vs. the previous close at 81.98 on Friday.
Anuj Chowdhury – Research Analyst at Sharekhan by BNP Paribas, said the Indian rupee rose with the decline in crude oil prices and the sharp jump in India’s foreign exchange reserves.
India’s foreign exchange reserves swelled by $12.743 billion to $609.022 billion In the week ending July 14, the Reserve Bank of India said on Friday.
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Total reserves decreased by $2.901 billion to $593.198 billion in the previous reporting week.
In October 2021, the country’s foreign exchange reserves reached an all-time high of $645 billion. Reserves were running low as the central bank deployed the fund to defend the rupee amid pressure stemming in large part from global developments.
However, the weak tone in the local markets and a strong US dollar capped off the sharp gains. Chowdhury said the US dollar rose amid disappointing PMI data from Europe and the UK, which showed a deeper contraction in activity.
Meanwhile, the dollar index, which measures the strength of the greenback against a basket of six currencies, rose 0.19 percent to 101.26.
Brent crude futures, the global oil benchmark, rose 0.74 percent to $81.67 a barrel.
“We expect the rupee to trade with a slight negative bias to the deterioration of global risk sentiment which may support the safe-haven US dollar and put pressure on riskier currencies,” Chowdhury said.
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Chowdhury added, “Risk aversion in global markets and growing concerns about a global economic slowdown may also affect the rupee.
“However, continued foreign inflows may support the rupee at lower levels. Investors may remain cautious ahead of the FOMC meeting later this week. We expect USD/INR to trade in a range of 81.50 to 82.40 in the near term.”
In terms of the local stock market, the BSE Sensex index of 30 shares closed 299.48 points, or 0.45 percent, at 66,384.78 points. The broader NSE Nifty index fell 72.65 points, or 0.37 percent, to 19,672.35 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Friday unloading shares worth Rs 1,998.77 crore, according to exchange data.