Forex traders said post the RBI monetary policy announcement, investors will await the Industrial Production (IIP) and CPI data for further cues. File
| Photo Credit: The Hindu

The rupee depreciated 8 paise to close at 84.74 (provisional) against the U.S. dollar on Monday (December 9, 2024), dragged down by fresh foreign fund outflows and a muted trend in domestic equities.

Forex traders said the rupee remains in a weakening mode due to dollar demand from importers and foreign banks.

At the interbank foreign exchange, the rupee opened at 84.70 and touched the lowest level of 84.73 against the greenback during intra-day trade. The unit ended the session at 84.74 (provisional) against the dollar, registering a fall of 8 paise over its previous close.

On Friday (December 6, 2024), the rupee appreciated by 5 paise to settle at 84.66 against the U.S. dollar.

On December 4, the rupee had slumped to its all-time low of 84.76 (provisional) against the U.S. dollar.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.09% at 105.96.

Brent crude, the global oil benchmark, surged 0.89% to $71.75 per barrel in futures trade.

Forex traders said post the RBI monetary policy announcement, investors will await the Industrial Production (IIP) and CPI data for further cues.

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.

On the domestic equity market front, the 30-share benchmark index Sensex closed 200.66 points, or 0.25% lower, at 81,508.46 points. The Nifty fell 58.80 points, or 0.24%, to 24,619.00 points.

Foreign Institutional Investors (FIIs) offloaded ₹1,830.31 crore in the capital markets on net basis on Friday (December 6, 2024), according to exchange data.

Meanwhile, India’s forex reserves increased by $1.51 billion to $658.091 billion for the week ended November 29, the RBI said on Friday (December 6, 2024).

The overall reserves had dropped by $1.31 billion to $656.582 billion in the previous reporting week.

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.