Rupee opens flat, gains 1 paisa to 84.07 against US dollar in early trade

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The Indian rupee opened flat against the US dollar on Thursday, gaining 1 paisa to trade at 84.07 in early deals. This marginal increase comes amid a strong dollar and ongoing foreign fund outflows that have affected investor sentiment.

Forex traders noted that the rupee remained range-bound, primarily influenced by month-end demand which kept the US dollar in high demand. Furthermore, a subdued performance in domestic equities also weighed on the local currency. Analysts believe that any intervention by the Reserve Bank of India (RBI) could provide support to the rupee at lower levels.

At the interbank foreign exchange market, the rupee commenced trading at 84.08 against the dollar before rising to 84.07. On Wednesday, the currency had depreciated by 3 paise, closing at 84.08 against the dollar. The rupee has been fluctuating around its all-time low levels, having reached its lowest closing point of 84.10 on 11 October.

Throughout October, the rupee has consistently traded below the 84-mark, with recent pressures largely attributed to domestic factors. Amit Pabari, Managing Director of CR Forex Advisors, highlighted month-end dollar demand from local oil companies as a significant contributor to this trend.

In a positive turn, upcoming inflows from initial public offerings (IPOs) could provide some relief for the rupee. Companies such as Swiggy, Acme Solar Holdings, and Sagility Ltd are expected to raise funds next week, which could bolster the local currency.

Given the current scenario, analysts anticipate the USD/INR pair to remain within a narrow range of 83.80 to 84.20, with RBI interventions expected to offer essential support and prevent any substantial downward movement.

Meanwhile, the dollar index, which measures the strength of the US dollar against a basket of six currencies, was trading at 104.14, reflecting a 0.14 per cent increase. In the global oil market, Brent crude prices rose by 0.48 per cent, reaching USD 72.90 per barrel in futures trade.

On the domestic equity front, the Sensex fell by 163.76 points, or 0.20 per cent, settling at 79,778.42 points. The Nifty dropped 32.00 points, or 0.13 per cent, to 24,308.85 points. Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday, offloading shares worth Rs 4,613.65 crore, according to exchange data.

(With inputs from PTI)

From a macroeconomic perspective, the output of eight key infrastructure sectors saw a modest expansion of 2 per cent in September. However, this growth rate was slower compared to the 9.5 per cent recorded during the same month last year, according to official data released on Wednesday. Additionally, government data revealed that the Centre's fiscal deficit reached 29.4 per cent of the full-year target by the end of the first half of the financial year FY25.