Due to the strength of the greenback in the overseas market and firming in crude oil prices, the Indian rupee today fell to 75.42 against the US dollar at the day’s low. At the interbank forex, the rupee opened on a weak note and fell at 75.42, its weakest since July, 2020, recording a fall of 6 paise from the previous close. The rupee was trading at 75.26 against the US dollar in recent trade.
On Monday, the rupee had lost 37 paise to close at 75.36 against the US dollar. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.03% to a one-year high of 94.34.
“The rise in crude oil prices and the strengthening of the dollar have hit the rupee twice. Energy shortages across Asia to Europe have led to a sharp rise in oil prices and re-emerging concerns of hot-steam inflation. India imports around 80% of its oil needs, higher prices result in increased imported inflation, putting pressure on the rupee,” CR Forex Advisors said in a note.
“Additionally, the energy crisis in China is deepening as floods have forced miners to cut production, sending coal prices even higher. In addition, China Evergrande Group is reportedly in the midst of its third round of bond payments. And the news of Beijing’s more crackdown on private firms has completely dampened the risk sentiment,” it added.
Analysts said going forward, investors will have to keep an eye on India’s September CPI inflation numbers and industrial output for August for further direction in the rupee.
positive for Rupee There are upcoming IPOs of about 35 companies that want to raise approx. ₹80,000 crore from October to December, said CR Forex Advisors.
According to data compiled by Bloomberg, Indian companies have raised $10.8 billion from share sales for the first time this year. At this pace, 2021 could well surpass the record $11.8 billion collected in 2017.
On the other hand, “The ceiling of 75.50-75.60 is acting as a tight resistance, if breached then we may move towards 75.80 to 76.00 levels in the near term. It remains to be seen whether RBI intervenes to protect the rupee beyond these levels,” CR Forex Advisors said.
Foreign institutional investors were net sellers in the capital markets on Monday as they unloaded shares of value ₹1,303.22 crore as per exchange data.
On the domestic equity market front, the 30-share Sensex was trading marginally lower amid weak Asian equity markets as investors worried about rising energy crisis, rising inflation, signs of slowdown in the global economy and central bank financial end. . Cooperation.
The Reserve Bank of India in its policy review last week lowered its full-year inflation forecast to 5.3% from 5.7% but looked cautious about the impact of higher global crude oil and other commodity prices on inflation. (with agency input)
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