Wednesday, March 22, 2023

Rupee declines by 42 paise to 81.82

The rupee fell by 42 paise to close at 81.82 against the US dollar on Monday, snapping its two-session gaining streak as heavy selling in domestic equities and a spike in crude oil prices weighed on the local unit.
Besides, a stronger greenback against key rivals and weak macro data put pressure on the domestic currency, forex dealers said.
At the interbank foreign exchange market, the local currency opened weak at 81.65, fell further to 81.98 against the American currency. It finally ended at 81.82, down 42 paise over its previous close. In the previous session, the rupee settled at 81.40 against the greenback. “The rupee weakened against the dollar on Monday amid weak risk sentiment and as oil importers picked up dollar expecting a big rise in crude prices as OPEC+ was considering slashing output to support a recent downturn in prices.
“Meanwhile, domestic equities fell as concerns rose around FPI outflows from equities and weighed on the local unit. In the overseas markets, the dollar index was rebounded while the Euro remained flat,” Sriram Iyer, Senior Research Analyst at Reliance Securities, said.
However, the Sterling rebounded after media reported that Britain government reversed the plan to cut the highest rate of income tax. The Yen weakened past 145 per dollar and for the first time since September 22 when authorities intervened to prop up the currency, Iyer added.
“Indian rupee depreciated by 0.51% today on weak domestic markets and surge in crude oil prices. Disappointing macroeconomic data also weighed on Rupee,” Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas, said.
India’s Manufacturing PMI slipped to 55.1 in September, trailing estimates of 55.80 and previous month’s reading of 56.2.
The rupee started the month on the back foot following higher crude oil prices and sour risk sentiments. However, the volatility and volumes remained lower amid the holiday truncated week. In the near term, spot USD/INR is expected to trade in the range of 82.30 to 81.10 with bias remaining on the bullish side, Dilip Parmar, Research Analyst, HDFC Securities, said.
On the domestic equity market front, the 30-share BSE Sensex dropped 638.11 points or 1.11 per cent to end at 56,788.81, while the broader NSE Nifty fell 207 points or 1.21 per cent to 16,887.35.


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