Rupee rises 8 paise to 84.78 against US dollar in early trade
The rupee recovered from its all-time low and appreciated 8 paise to 84.78 against the US dollar in morning trade on Tuesday, supported by fresh foreign fund inflows and a positive trend in domestic equities.
The government on Monday appointed Revenue Secretary Sanjay Malhotra as the 26th Governor of the Reserve Bank of India.
Forex traders said Shaktikanta Das’s departure introduced uncertainty, as his tenure was marked by policies that safeguarded the rupee against drastic declines. “Adding to this volatility, Sanjay Malhotra’s stance prioritising economic stability over revenue concerns stirred mixed reactions,” CR Forex Advisors MD Amit Pabari said.
At the interbank foreign exchange, the rupee opened at 84.80 and moved in a tight range and touched 84.78 against the greenback, registering a gain of 8 paise over its previous close. It was later trading at 84.82 against the dollar.
On Monday, the rupee saw its steepest fall in over a month and plunged 20 paise to settle at lowest-ever level of 84.86 against the US dollar.
“It depends on what the new governor decides on tackling the weakness in rupee or whether he follows the policies of his predecessor,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP. He added that “the weakness in rupee is here to stay for now unless RBI Governor decides the other way.
Shaktikanta Das, who will demit office as the Governor of the Reserve Bank of India on Tuesday, was the key man behind the planning and execution of the demonetisation drive and rollout of the landmark goods and services tax (GST). At the RBI, he steered India’s monetary policy response during the challenging period of the pandemic.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 106.15, unchanged from its previous close.
Brent crude, the global oil benchmark, fell 0.36 per cent to $71.88 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index Sensex was trading 83.08 points, or 0.10 per cent higher, to 81,591.54 points. The Nifty rose 23.35 points, or 0.09 per cent, to 24,642.35 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday, as they purchased shares worth ₹724.27 crore, according to exchange data.