Rupee falls 8 paise to end at record closing low of 83.27 against the US dollar

    The Indian rupee declined to a fresh record closing low against the US dollar on Monday amid surging crude oil prices. The local unit ended 8 paise lower at 83.27 a dollar as against Friday’s close of 83.19.

    The US dollar index, which gauges the greenback’s strength against a basket of six currencies, fell marginally by 0.11% to 105.20.

    Elevated crude oil prices, strength in American currency, foreign fund outflows, weakness in domestic equities and a widening trade deficit weighed on the rupee.

    On Friday, the rupee depreciated 16 paise to end at 83.19 a dollar.

    “Ahead of the holiday, the rupee closed at another record low following risk-averse sentiments and a rally in crude oil prices,” said Dilip Parmar, Research Analyst, at HDFC Securities.

    “This week will remain highly volatile following a series of central bank policy rate meetings across the developed and emerging market economies. The baseline of it is the dollar to hold onto its strength through the week,” Parmar said.

    He expects in the near term, spot USD/INR to cross the record high and may see a level of 83.50 to 83.70 while it could hold the support of 83.

    Meanwhile, India’s merchandise trade deficit rose to a 10-month high of $24.16 billion in August, higher than the expected $21 billion, as exports continued to slow due to weak demand in the West and China.

    India’s forex reserves dropped by $4.992 billion to $593.904 billion for the week ended September 8, the Reserve Bank of India said on Friday.

    Crude oil prices traded higher, weighing on domestic unit.

    Brent crude futures gained 0.44% to $94.34 per barrel and US West Texas Intermediate crude futures rallied 0.65% to $91.36.

    Investors will focus this week on central bank decisions, beginning with the US Federal Reserve on Wednesday, followed by the Bank of England and Bank of Japan.

    On the domestic front, the Indian stock market indices snapped 11-session winning streak on Monday and closed in the negative territory on losses in index heavyweights amid weak global cues.

    The Sensex closed 241.79 points, or 0.36%, lower at 67,596.84, while the Nifty ended 59.05 points, or 0.29%, lower at 20,133.30.

    On Friday, the Foreign institutional investors (FIIs) net bought Indian shares worth 164.42 crore, while Domestic Institutional Investors (DIIs) net purchased shares to the tune of 1,938.57 crore, as per provisional data available on the exchanges.

    (With inputs from PTI)

    Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

    Source link

    Latest articles


    Related articles