Mumbai, May 22 (PTI) Declining for the fourth straight session, the rupee fell 17 paise to close at 82.84 against the US dollar on Monday, weighed down by a strong greenback in the overseas market.
However, a firm trend in domestic equities and sliding crude prices in international markets restricted the rupee’s loss, forex traders said.
At the interbank foreign exchange, the domestic unit opened at 82.80 against the dollar, and finally settled at 82.84 (provisional), down 17 paise from its previous close.
During the day, the rupee touched a high of 82.70 and a low of 82.86 against the greenback.
On Friday, the rupee had settled at 82.67 against the dollar.
The rupee depreciated to the lowest levels since February 2023 on underlying strength in the greenback and buying of Dollars by the RBI to shore up its forex reserves, said Anuj Choudhary – Research Analyst, Sharekhan by BNP Paribas.
However, the weak tone in crude oil prices and positive domestic equities cushioned the downside. US Dollar eased slightly on a dovish statement by Fed Chair Jerome Powell and debt ceiling talks being stalled.
“We expect the rupee to trade with a negative bias on risk-off sentiments amid concerns over the debt ceiling talks. However, expectations that crude oil prices may decline further amid sluggish demand from China may prevent a sharp fall in the rupee.
“Dovish hints by Powell may also support the rupee at lower levels. Market participants may remain cautious ahead of FOMC minutes this week. We expect the USD/INR spot to trade between 82.40 to 83.30 in the near term,” Choudhary added.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.09 per cent to 103.10.
Brent crude futures, the global oil benchmark, declined 0.16 per cent to USD 75.46 per barrel.
“RBI’s removal of the highest denomination currency note of 2,000 and concerns about the debt-ceiling negotiations in the US have impacted the rupee. As long as it remains below 82.50, the rupee is likely to continue its weakness. The expected range for the rupee is 82.70 to 83.05,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
On the domestic equity market front, the 30-share BSE Sensex closed 234.00 points or 0.38 per cent higher at 61,963.68 points. The broader NSE Nifty advanced 111.00 points or 0.61 per cent to 18,314.40 points.
Foreign Institutional Investors (FIIs) emerged as net buyers in the capital markets on Monday as they bought shares worth Rs 922.89 crore, according to exchange data.
According to Dilip Parmar, Research Analyst, HDFC Securities the Indian rupee depreciated for the fourth day in a row following weaker Asian currencies.
However, the greenback declined versus major currencies in anticipation of a pause in interest rate increases from FOMC next month. A soft landing for the US economy is seen as the biggest risk to dollar bulls.
“Technically, spot USD/INR is in an uptrend and has psychological resistance at 83 while the support has been placed at 82.50. We expect bullish momentum to continue in the coming days as long as the regional currencies remain weak against the US dollar,” Parmar said.
Meanwhile, rising for the second consecutive week, India’s forex kitty jumped USD 3.553 billion to USD 599.529 billion for the week ended May 12, the RBI said on Friday.
The overall reserves had jumped by USD 7.196 billion to USD 595.976 billion for the previous week. PTI DRR BAL BAL
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