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Indian rupee falls 12 paise to 79.25 against US dollar in early trade

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In early trade Friday, the rupee fell 12 paise against the US dollar to 79.25. This was in line with the strength of the American currency as well as persistent outflows from foreign funds. The rupee opened at 79.20 per dollar at the interbank foreign currency, but then fell to 79.25. This was a 12 paise decrease from the previous close.

The rupee closed Thursday at 79.13 dollars against the dollar. The dollar index, which measures the strength of the greenback against a basket six currencies, traded 0.05 percent lower at 107.07. “As the dollar index climbs towards 107, and crude oil up above USD 100/barrel, it doesn’t seem that we will see lower levels on USD/INR,” stated Anil Kumar Bhansali Head of Treasury, Finrex Treasury Advisors.

“In any event, flows won’t follow immediately after announcements of measures and positive market sentiments. Bhansali said that the RBI could take non-conventional measures to stabilize rupee. Brent crude oil futures rose 0.17 percent to USD 104.83 a barrel. The domestic equity market was up 0.49 percent at 54.442.40 with the 30-share Sensex trading 263.94 points, or 0.49 percent higher, while the wider NSE Nifty rose 0.52 percentage to 16,216.50.

The RBI raised the overseas borrowing limit for companies on Wednesday and relaxed the norms for foreign investment in government bonds. It also announced a series of measures to increase foreign exchange inflows to counter the fall in the rupee.

According to the central bank, it had also stated that it was monitoring the liquidity in the forex market closely and continuously and has intervened as necessary in all segments of the market to reduce dollar tightness and ensure orderly market functioning.

Minutes of the US Federal Reserve meeting last month showed a hawkish attitude as a 75 basis point rate hike is possible in July. These minutes were made public on Wednesday. According to stock exchange data, foreign institutional investors were net sellers on Thursday in the capital markets as they sold shares worth Rs 952.22 crore.

 

Source: https://www.moneycontrol.com/news/business/markets/indian-rupee-falls-12-paise-to-79-25-against-us-dollar-in-early-trade-8797301.html

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