Mumbai, Jul 22 (PTI) The rupee consolidated in a narrow range to settle 4 paise higher at 83.66 against the American currency on Monday, as crude oil prices and the US dollar retreated from their elevated levels.
Forex traders said the Indian rupee recovered from all-time low levels and traded in a narrow range as mixed-to-weak domestic markets put downside pressure on the rupee. However, weak tone in the US dollar and a decline in crude oil prices cushioned the downside.
At the interbank foreign exchange market, the local unit opened at 83.66, and touched an intraday high of 83.65 and a low of 83.68 against the dollar during the trading session.
It finally settled at 83.66 against the American currency, registering a gain of 4 paise from its previous close.
On Friday, the rupee depreciated 7 paise to settle at its all-time low of 83.70 against the US dollar.
“We expect the rupee to trade with a slight negative bias on the weak tone in the global markets and overall strength in the US dollar. Weak Asian currencies and a weak yuan may also support the dollar. However, weakness in crude oil prices and FII inflows may support the rupee at lower levels,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
Any intervention by the RBI may also support the rupee. Investors may take cues from India’s Union Budget. USD-INR spot price is expected to trade in a range of Rs 83.20 to Rs 84.20, Choudhary added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.17 per cent at 104.22.
Brent crude futures, the global oil benchmark, were trading marginally lower by 0.29 per cent at USD 82.39 per barrel.
On the macroeconomic front, India’s forex reserves jumped by USD 9.699 billion to an all-time high of USD 666.854 billion for the week ended July 12, the RBI said on Friday.
In the previous reporting week, the kitty had increased by USD 5.158 billion to USD 657.155 billion, surpassing the previous high of USD 655.817 billion for the week ended June 7.
In the domestic equity market, the 30-share BSE Sensex fell 102.57 points or 0.13 per cent to settle at 80,502.08 points and Nifty dropped 21.65 points or 0.09 per cent to 24,509.25 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday as they purchased shares worth Rs 3,444.06 crore, according to exchange data.
The Economic Survey 2023-24, which was tabled in Parliament on Monday, projected India’s GDP to grow at 6.5-7 per cent in 2024-25, down from a high of 8.2 per cent in the the preceding financial year.
The projection in the Economic Survey is a tad lower than the Reserve Bank’s growth estimates of 7.2 per cent.
Finance Minister Nirmala Sitharaman will present the Union Budget in the Lok Sabha on Tuesday.
“The upcoming Union Budget tomorrow is expected to provide a strong outlook for the rupee, as it will outline India’s income and expenditure roadmap for the next year. The rupee remains range-bound between 83.25 and 83.80 broadly,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities. PTI DRR HVA
About the Author
