1 hr ago
Rupee Slips 3 Paise as RBI Defends Key 96 Level
The Indian rupee became slightly weaker against the US dollar.
It fell three paise to 95.97 in early trading.
Some state-run oil companies needed dollars, increasing demand for the US currency.
Foreign investors were also selling Indian investments.
Higher US interest-rate yields added more pressure.
The Reserve Bank of India sold dollars through state-run banks to support the rupee.
This helped keep the rupee from falling past the important 96.00 level.
The dollar was strong, while Indian stocks and oil prices moved lower.
The rupee opened at 95.95 and fell to 95.97 against the US dollar on Thursday, October 1.
Dollar demand from state-run oil companies, foreign portfolio outflows and firm US yields pressured the rupee.
RBI-backed dollar sales through state-run banks helped keep the exchange rate below 96.00.
The dollar index rose 0.09% to 101.54, near a reported two-month high.
Brent crude and Indian equities declined, while foreign investors sold ₹10,148.41 crore of equities on Wednesday.
- Who
- The Indian rupee, the Reserve Bank of India, state-run oil companies, foreign portfolio investors and currency-market participants.
- What
- The rupee weakened three paise to 95.97 against the US dollar in early trade, while RBI dollar sales limited its decline.
- Where
- The move occurred in the interbank foreign exchange market in Mumbai.
- When
- Thursday, October 1, in early trading; the rupee had settled at 95.94 on Wednesday.
- Why
- Dollar demand from state-run oil companies, foreign portfolio outflows, firm US yields and a stronger dollar pressured the rupee; RBI intervention helped contain losses.
Market Pressure
RBI Support
Direction of the rupee
Market Pressure
Dollar demand from state-run oil companies, foreign portfolio outflows, firm US yields and the stronger dollar pushed the rupee lower.
RBI Support
RBI-backed dollar sales through state-run banks helped limit the rupee’s decline.
The 96.00 threshold
Market Pressure
Market pressures raised the risk of the exchange rate moving beyond 96.00.
RBI Support
Dollar supplies in spot and forward markets helped keep the exchange rate below 96.00.
Key facts
- Rupee opening rate
- 95.95 per US dollar
- Early-trade rate
- 95.97 per US dollar
- Previous close
- 95.94 per US dollar on Wednesday
- Dollar index
- 101.54, up 0.09%
- Brent crude
- $96.87 per barrel, down 1.18%
- Sensex
- 72,257.30, down 215 points in early trade
- Nifty
- 22,518.90, down 107.25 points in early trade
- Foreign institutional selling
- ₹10,148.41 crore net on Wednesday
Quotes
Anil Kumar Bhansali
Head of treasury and executive director at Finrex Treasury Advisors LLP
“Aggressive foreign exchange intervention by the Reserve Bank of India (RBI)-acting through state-run banks to supply dollars in both the spot and forward markets-served as the primary market defender, preventing spot rates from breaking past the key 96.00 boundary.”
deccanchronicle.com
“The dollar index is at a two-month high near 101.5, up almost 2 per cent in September and within sight of its 52-week high near 101.8,”
deccanchronicle.com
Sources
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