The Indian rupee witnessed a decline of 5 paise, settling at an unprecedented low of 83.33 against the US dollar on Monday. The fall was attributed to a negative trend in domestic equities and persistent foreign fund outflows, as reported by forex traders.
At the interbank foreign exchange market, the rupee opened at 83.31 and concluded at its lowest level ever, marking a 5 paise drop from its previous close of 83.28 on Friday.
Praveen Singh, Associate VP, Fundamental Currencies and Commodities at Sharekhan by BNP Paribas, stated, “India’s manufacturing and production data released Friday were short of forecasts.” He added that the currency markets are currently range-bound, with the USD-INR pair expected to trade between Rs 83 and Rs 83.70.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, commented on the rupee’s situation, saying, “RBI might have protected the rupee from further depreciation, but the dollar buying continued and kept the rupee well offered for the entire day.”
The forex market will be closed on Tuesday due to Diwali Balipratipada. Bhansali anticipates that the rupee will be in a narrow range of 83.40 to 83.40 on Wednesday as it tracks the dollar index and US yields closely.
On the global front, the dollar index, measuring the greenback’s strength against a basket of six currencies, was down by 0.08% at 105.77. Brent crude futures, the global oil benchmark, saw a marginal increase of 0.02% at USD 81.45 per barrel.
In the domestic equity market, the Sensex fell by 325.58 points (0.50%) to settle at 64,933.87 points, and the Nifty declined by 82.00 points (0.42%) to 19,443.55 points. Foreign institutional investors were net sellers in the capital market on Monday, offloading shares worth Rs 1,244.44 crore.
The retail inflation in India dipped to a four-month low of 4.87% in October, primarily due to easing food prices, approaching the Reserve Bank’s target of 4%, according to government data released on Monday.
The country’s forex reserves surged by USD 4.672 billion to USD 590.783 billion for the week ended November 3, as announced by the Reserve Bank on Friday. Foreign currency assets, a crucial part of the reserves, rose by USD 4.392 billion.
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