2 hrs ago
Rupee Slides to 95.79 as Oil and Outflows Weigh
India’s rupee became weaker against the US dollar on Friday.
It fell to 95.79 rupees for one dollar.
Expensive oil makes it costlier for India to pay for imports.
Foreign investors were also selling Indian shares, adding pressure to the rupee.
Global interest rates and bond yields were another concern.
The Reserve Bank of India and India’s large foreign-exchange reserves helped support the currency.
Strong domestic economic growth also offered some protection.
An analyst said the rupee could move toward 96, with 95 acting as support.
Investors will watch inflation figures from India and the United States for clues about what happens next.
The rupee fell 27 paise to 95.79 against the US dollar in early Friday trade.
It opened at 95.70 after closing at 95.52 on Thursday, when it lost 44 paise.
Elevated crude prices, rising global yields and foreign portfolio outflows pressured the currency.
Brent crude traded 0.76% lower at $108.45 per barrel amid US-Iran tensions and Strait of Hormuz supply concerns.
Record foreign-exchange reserves, Reserve Bank intervention and 7.8% domestic growth provided support, while investors awaited inflation data.
- Who
- The Indian rupee, the Reserve Bank of India, foreign portfolio investors and currency-market participants.
- What
- The rupee depreciated 27 paise to 95.79 against the US dollar in early trade.
- Where
- At the interbank foreign-exchange market in Mumbai, India.
- When
- Friday morning; the rupee had closed at 95.52 on Thursday.
- Why
- Elevated crude prices, rising global yields and foreign portfolio outflows outweighed support from foreign-exchange reserves, central-bank intervention and domestic growth.
Supportive Factors
Downward Pressures
Currency outlook
Supportive Factors
Record foreign-exchange reserves, active Reserve Bank intervention and 7.8% domestic growth provide support for the rupee.
Downward Pressures
Expensive crude, rising global yields and foreign portfolio outflows are keeping the rupee under pressure.
Near-term trading levels
Supportive Factors
The analyst identified 95 as a support level for the rupee.
Downward Pressures
The analyst said the rupee could move toward 96 against the dollar.
Oil-market conditions
Supportive Factors
Brent crude was down 0.76% to $108.45 per barrel.
Downward Pressures
Oil remained above $100, while US-Iran tensions and possible Strait of Hormuz disruptions could keep import costs elevated.
Key facts
- Rupee rate
- 95.79 per US dollar in early trade
- Opening rate
- 95.70 per US dollar
- Previous close
- 95.52 per US dollar
- Brent crude
- $108.45 per barrel, down 0.76%
- Foreign portfolio selling
- Net equity outflows of ₹438.24 crore on Thursday
- Domestic growth
- 7.8%
- Dollar index
- 99.16, up 0.12%
Quotes
Anindya Banerjee
Head of Commodity and Currency Research at Kotak Securities
“For the rupee, the pressure continues. It remains in an uptrend beyond 95 on the back of costly oil and foreign portfolio outflows, and we could see 96, with 95 now acting as support”
deccanchronicle.com
thehansindia.com
Sources
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