5 hrs ago
Rupee Breaches 96 Before Mixed Reports on Thursday Close
The rupee is India’s currency, and it had a turbulent day against the US dollar.
At one point, one dollar cost more than ₹96.
This was the first time that level had been crossed since July 24.
Banks sold dollars on behalf of the Reserve Bank of India, helping the rupee recover.
Lower prices for oil and a small decline in the dollar’s global value also helped.
Investors were still worried about money leaving Indian markets and possible US tariffs.
A US Federal Reserve interest-rate increase added more pressure.
The two reports gave different final numbers, with one saying the rupee weakened slightly and the other saying it strengthened slightly.
The rupee fell to ₹96.10 during Thursday trading, crossing ₹96 for the first time since July 24.
Reports differed on the provisional close: one said ₹95.94, down 3 paise, while another said ₹95.89, up 2 paise.
Bank dollar selling on behalf of the Reserve Bank of India was credited with helping the currency recover from its intraday low.
Foreign fund outflows, a US Federal Reserve rate hike, high crude prices and trade uncertainty pressured the rupee.
The dollar index and Brent crude both declined, while Indian equities posted mixed results.
- Who
- The Indian rupee, the US dollar, the Reserve Bank of India, foreign investors and the US Federal Reserve were involved.
- What
- The rupee breached ₹96 during trading before recovering, but the reports gave different closing figures: ₹95.94, down 3 paise, and ₹95.89, up 2 paise.
- Where
- The interbank foreign exchange market in India.
- When
- Thursday, September 17, during the interbank foreign exchange session.
- Why
- Foreign fund outflows, a US interest-rate hike, trade uncertainty and crude prices pressured the rupee, while bank dollar selling, lower crude prices and a softer dollar index supported its recovery.
Reported Rupee Close
Market Forces and Recovery
End-of-day performance
Reported Rupee Close
One report said the rupee settled at ₹95.94, 3 paise lower than the previous close.
Market Forces and Recovery
The other report said the rupee settled at ₹95.89, 2 paise higher, snapping its seven-day falling streak.
Reason for the recovery
Reported Rupee Close
The report attributed the recovery to likely Reserve Bank of India intervention and heavy dollar defence.
Market Forces and Recovery
The other report specifically described dollar selling by banks on behalf of the Reserve Bank of India as the force that helped the rupee recover.
Sources of pressure
Reported Rupee Close
Foreign fund outflows, global trade uncertainty, the US Federal Reserve’s rate hike and proposed tariffs were cited as factors weighing on the rupee.
Market Forces and Recovery
The report also cited sustained stock-market outflows, high crude prices, the Federal Reserve rate hike and possible tariffs on countries importing Russian oil.
Key facts
- Intraday low
- ₹96.10 per US dollar
- Intraday high
- ₹95.78 per US dollar
- Reported closing figures
- ₹95.94, down 3 paise, in one report; ₹95.89, up 2 paise, in another
- Previous close
- ₹95.91 per US dollar
- Dollar index
- Down 0.05% at 99.92
- Brent crude
- Down 1.29% at $104.47 per barrel in futures trading
- Foreign institutional investor selling
- ₹3,208.76 crore on Thursday, according to one report; ₹2,032.61 crore on Wednesday, according to the other
Quotes
Dilip Parmar
Senior Research Analyst at HDFC Securities
“The Indian rupee experienced a highly volatile trading session on Thursday, initially buckling under a hawkish Fed onslaught and weaker Asian currency sentiment. However, those early losses proved fleeting as aggressive central bank intervention swooped in with heavy-handed dollar defence, pulling the local unit off the canvas to secure marginal gains.”
theprint.in
CNBC TV 18
“turning to the technical outlook, the spot USD/INR pair remains in an overall upward trend following its recent surge, though we anticipate a period of short-term consolidation with key support around ₹95.45 and resistance capped at ₹96.30.”
theprint.in
CNBC TV 18
Sources
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