Despite an increasingly hostile external environment, India is in a better position than many other countries to avoid the risk of a potential standoff with widespread derailments, said an article by the Reserve Bank of India.
Despite an increasingly hostile external environment, India is in a better position than many other countries to avoid the risk of a potential standoff with widespread derailments, said an article by the Reserve Bank of India.
The rupee strengthened by 6 paise to 78.04 against the US dollar in early trade on Friday as softening crude oil prices supported the local unit.
However, foreign fund outflows, a weak trend in domestic equities and a stronger US dollar overseas limited the gains, forex dealers said.
At the interbank foreign exchange, the rupee opened stronger at 78.03 against the US dollar, then closed at 78.04, registering a rise of 6 paise over the previous close.
The rupee had closed at 78.10 against the US dollar in the previous session.
On the domestic equity market front, the 30-share Sensex was trading 251.06 points or 0.49% lower at 51,244.73, while the broader NSE Nifty fell 90.15 points or 0.59% at 15,270.45.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.60% to 104.25.
Global oil benchmark Brent crude futures slipped 0.78% to $118.88 a barrel.
Foreign institutional investors were net sellers in the capital markets on Thursday as they sold shares worth Rs 3,257.65 crore, according to exchange data.
Meanwhile, an RBI article said India is better positioned than many other countries to avoid the risk of a potential standoff, which is broadly on track despite an increasingly hostile external environment.
Economic Affairs Secretary Ajay Seth said on Thursday that the government does not see any adverse impact on the Indian economy after the US Federal Reserve’s decision to hike interest rates by 75 basis points.
Mr. Seth told reporters, “All the central banks are grappling with this and taking adequate measures which are necessary to control inflation. I see a fair amount of coordination… Directly or indirectly they are together. Moving forward.”
“Therefore, I do not see any adverse impact of this (rate hike by the Fed) as the Reserve Bank of India, in the last two cycles, has already taken adequate measures,” he said.
On Wednesday, the US Federal Open Market Committee raised the target range for the federal funds rate by 75 basis points to 1.50-1.75%, on expected lines. It also said it would aggressively increase rates for the rest of the calendar year.
The Reserve Bank of India (RBI) became a net buyer of the US currency in April when it bought USD 1.965 billion from the spot market, according to the RBI’s monthly bulletin for June.