Forex traders said an overall decline in the U.S. dollar and crude oil prices supported the rupee. However, weak domestic markets capped sharp gains. File
| Photo Credit: The Hindu

The rupee settled on a flat note and appreciated by just 1 paisa to close at 84.70 (provisional) against the U.S. dollar on Friday (December 6, 2024), as the Reserve Bank of India left the repo rate unchanged at 6.5% in its monetary policy decision.

The Reserve Bank of India on Friday (December 6, 2024) kept its key interest rate unchanged, citing inflation risks, but cut the Cash Reserve Ratio that banks are required to park with the central bank, boosting money with lenders to support a slowing economy.

Forex traders said an overall decline in the U.S. dollar and crude oil prices supported the rupee. However, weak domestic markets capped sharp gains.

At the interbank foreign exchange, the rupee opened at 84.66 and touched an intraday high of 84.53 and a low of 84.70 against the greenback.

On Thursday (December 5, 2024), the rupee recovered from its all-time low level and settled for the day with gains of 4 paise at 84.71 against the U.S. dollar.

“We expect the rupee to trade with a slight negative bias as the RBI lowered India’s GDP growth for FY25 to 6.6% from 7.2% in its previous projections,” said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan.

RBI lowered its growth forecast for the year ending March 2025 to 6.6% from its earlier projection of 7.2%.

RBI Governor Shaktikanta Das, however, said the GDP slowdown bottomed out in the July-September quarter and has seen a pick-up in subsequent months due to festival spending and strong agriculture output.

Mr. Choudhary further noted that the demand for the U.S. dollar may also keep the rupee under pressure.

However, weakness in crude oil prices and fresh foreign fund inflows may support the rupee at lower levels.

“Any intervention by the RBI may also support the rupee. Traders may take cues from non-farm payroll reports from the U.S. The USD-INR spot price is expected to trade in a range of 84.45 to 84.95,” Mr. Choudhary said.

Moreover, the Reserve Bank on Friday (December 6, 2024) announced a raise in the interest rate caps on the diaspora’s foreign currency deposits, in a move aimed at attracting more capital flows amid pressures on the rupee.

Announcing the fifth bi-monthly monetary policy for the current financial year, Mr. Das said it has been decided to increase the interest rate ceilings on Foreign Currency Non-Resident Bank deposits, or FCNR (B) deposits, as per tenors.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.13% at 105.85.

Brent crude, the global oil benchmark, fell by 0.33% to $71.85 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex closed 56.74 points, or 0.07% lower, to 81,709.12 points. The Nifty fell 30.60 points, or 0.12%, to 24,677.80 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday (December 5, 2024), as they purchased shares worth ₹8,539.91 crore, according to exchange data.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.16% at 106.15. File
| Photo Credit: The Hindu

The rupee recovered from its all-time low level and settled for the day with gains of just 3 paise at 84.72 (provisional) against the U.S. dollar in a range-bound trade on Thursday (December 5, 2024), amid a positive trend in domestic equities.

Forex traders said the Indian rupee recovered slightly on strength in the domestic markets and an overnight decline in crude oil prices. However, a positive U.S. dollar capped a sharp upside.

At the interbank foreign exchange, the rupee opened at 84.72, moved in a narrow range, and touched an intraday high of 84.70 and a low of 84.74 against the greenback.

On Wednesday (December 4, 2024), the rupee slumped by 7 paise to hit its lowest-ever closing level of 84.75 against the U.S. dollar.

“We expect the rupee to trade with a negative bias on the strong dollar and worries over an economic slowdown. However, weakness in crude oil prices and fresh FII outflows may support the rupee at lower levels,” said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan.

Mr. Choudhary further added that traders may take cues from weekly unemployment claims and trade balance data from the U.S. “The USD-INR spot price is expected to trade in a range of ₹84.50 to ₹84.95,” he said.

Moreover, market participants are also awaiting cues from the upcoming Reserve Bank of India (RBI) monetary policy on Friday (December 6, 2024), which will likely focus on balancing inflation and growth.

The Reserve Bank’s high-level panel on Wednesday (December 4, 2024) started deliberations on the bimonthly monetary policy amid expectations of status quo on interest rates as retail inflation is above the upper tolerance level of the central bank.

The decision taken by the RBI Governor Shaktikanāta Das-headed six-member Monetary Policy Committee (MPC) will be announced on Friday (December 6, 2024).

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.16% at 106.15.

Brent crude, the global oil benchmark, rose by 0.53% to $72.69 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex closed 809.53 points, or 1% higher, at 81,765.86. The Nifty rose 240.95 points, or 0.98%, to settle at 24,708.40 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday (December 4, 2024), as they purchased shares worth ₹1,797.60 crore, according to exchange data.

Representational image.
| Photo Credit: The Hindu

The Rupee recovered from its all-time low levels and appreciated by seven paise to 83.06 against the U.S. dollar in early trade on August 22, as the American currency retreated from its elevated levels.

Forex traders said the Rupee is trading in a narrow range as selling pressure by foreign investors dented sentiments, while the weak tone in the U.S. dollar and positive domestic markets cushioned the downside.

At the interbank foreign exchange, the domestic unit opened at 83.07, then touched a high of 83.06 against the American currency, registering a rise of seven paise over its last close. On Monday, the Rupee depreciated by three paise and settled for the day at an all-time low of 83.13 against the U.S. dollar.

“Rupee in the last one week has witnessed quite a bit of action but in the last couple of sessions it is consolidating in a narrow range and volatility has been low,” said Gaurang Somaiya forex and bullion analyst, Motilal Oswal Financial services.

Mr. Somaiya further added that the U.S. dollar too is retracing from higher levels after witnessing its longest winning streak in the last 15 months as it closed for the straight six weeks following safe haven buying on the back of uncertainty in China and better-than-expected economic numbers from the U.S.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.12% to 103.17. Brent crude futures, the global oil benchmark, fell 0.17% to $84.32 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 127.81 points or 0.20% higher at 65,343.90. The broader NSE Nifty advanced 41.90 points or 0.22% to 19,435.50.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday as they offloaded shares worth ₹1,901.10 crore, according to exchange data.