Representational Pic
The Indian rupee ended Monday on a largely flat note, appreciating by just 1 paisa to settle at 84.07 against the US dollar, aided by positive domestic market performance and a notable drop in global crude oil prices, according to PTI.
Forex traders reported that while the rupee traded within a narrow band throughout the day, the combination of a strong US dollar and upbeat local equities created a balance. Declining oil prices and suspected Reserve Bank of India (RBI) interventions further lent support to the currency, helping it hold steady at lower levels.
At the interbank foreign exchange market, the rupee opened at 84.08 against the greenback and hovered within a tight range before closing at 84.07, a minor rise of 1 paisa over Friday's close. On the previous day of trading, the rupee had slipped by 1 paisa, nearing its all-time low of 84.08 against the dollar.
Reflecting broader trends, the dollar index, which assesses the dollar's strength relative to a basket of six major currencies, showed a modest 0.02% increase to reach 104.27. Additionally, Brent crude futures saw a substantial dip of 6.05%, settling at USD 71.45 per barrel, a development likely to ease inflation concerns domestically.
ALSO READ
Mumbai public holiday alert: BSE, courts, banks closed for Christmas, New Year
Stock market today: Asian shares mostly lower, with most world markets closed for Christmas
Mid-Day Top News: ED seizes flat in case against Iqbal Kaskar and more
Nifty and Sensex open flat as market faces pressure from strong dollar
Rupee falls to 85.16, hitting a new all-time low against the US dollar
However, according to traders, the rupee faces ongoing pressure due to steady outflows of foreign funds. "The rupee may continue to trade with a bearish outlook given the dollar's ongoing strength and persistent FII outflows," noted Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas. He also highlighted that mounting support for Donald Trump's US presidential bid could further bolster the greenback.
Additionally, the typical end-of-month dollar demand from importers may place added pressure on the rupee. Yet, lower crude oil prices and the prospect of limited regional conflict involving Israel and Iran may lend support to the Indian currency, Choudhary observed.
In the stock markets, both the Sensex and Nifty displayed strong performance, with the Sensex climbing 602.75 points (0.76%) to close at 80,005.04 and the Nifty advancing by 158.35 points (0.65%) to 24,339.15.
Foreign institutional investors (FIIs) were net sellers on Friday, offloading shares worth Rs 3,036.75 crore, exchange data indicated. Additionally, India's foreign exchange reserves saw a reduction of USD 2.163 billion, bringing the total to USD 688.267 billion for the week ending October 18. In the previous week, the reserves had dropped significantly by USD 10.746 billion, marking one of the steepest declines in recent history, the RBI confirmed.
(With inputs from PTI)
