The Indian rupee concluded Monday’s trading session on a steady note at 83.31 (provisional) against the US dollar. Despite receiving support from positive domestic equities, the currency’s gains were offset by the strength exhibited by the American currency in the global market. Forex traders noted that while investor sentiments received a boost from the retreat of crude oil prices from elevated levels, the resilience of the US dollar limited the rupee’s upward momentum.
At the interbank foreign exchange market, the rupee commenced trading at 83.27 against the greenback. Throughout the session, it oscillated between an intraday high of 83.23 and a low of 83.33. Ultimately, the local unit settled at 83.31 (provisional) against the dollar, maintaining parity with its previous close.
On the preceding Friday, the rupee had appreciated by 8 paise to conclude at 83.31 against the US dollar, a move attributed to the Reserve Bank of India’s decision to maintain the benchmark interest rate unchanged at 6.5 percent for the seventh consecutive time.
Looking ahead, Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, expressed expectations for the rupee to trade with a slight positive bias. Factors such as rising risk appetite in global markets following reports of Israel withdrawing its soldiers from Southern Gaza, coupled with foreign institutional investor (FII) inflows and domestic market strength, may lend support to the rupee. However, a positive sentiment surrounding the greenback could limit sharp gains. Investor caution prevails ahead of inflation data releases from both the US and India later in the week, with USDINR spot price anticipated to fluctuate within the range of Rs 83.10 to Rs 83.50.
Meanwhile, the dollar index, measuring the greenback’s performance against a basket of six major currencies, registered a marginal increase of 0.07 percent to 104.37. This uptick comes amidst diminishing expectations of a rate cut by the US Federal Reserve following robust jobs data and hawkish commentary from Fed officials last week.
In the commodities market, Brent crude futures, the global oil benchmark, observed a decline of 0.92 percent, settling at USD 90.33 per barrel.
On the domestic front, the equity market witnessed bullish sentiment, with the Sensex advancing by 494.28 points, or 0.67 percent, to achieve an all-time high of 74,742.50 points. Similarly, the Nifty climbed by 152.60 points, or 0.68 percent, closing at a record peak of 22,666.30 points.
Foreign Institutional Investors (FIIs) continued their bullish stance in the Indian capital markets on Friday, with exchange data revealing net purchases of shares amounting to Rs 1,659.27 crore. This influx of foreign investment signals continued confidence in the country’s economic prospects and market stability.
Additionally, India’s foreign exchange reserves witnessed a notable uptick, with the Reserve Bank of India (RBI) reporting an increase of USD 2.951 billion to reach USD 645.583 billion for the week ended March 29. This marks the sixth consecutive week of growth in overall reserves, underscoring resilience and strength in the nation’s financial position.
In the preceding week, the foreign exchange kitty had expanded by USD 140 million to USD 642.631 billion. The consistent rise in reserves reflects proactive measures undertaken by the RBI to bolster liquidity and support the economy amidst evolving global economic dynamics.
Sources: moneycontrol.com