The Indian rupee kicked off the week on a positive note, opening 2 paise higher against the US dollar, buoyed by favorable macroeconomic data. The rupee’s opening rate stood at 83.24 per dollar, an improvement from Friday’s closing rate of 83.26.
Factors contributing to the rupee’s strength included a decrease in the dollar index by 0.10%, signaling a weaker US dollar against a basket of six major currencies. Traders noted that falling domestic inflation, a surge in industrial production, and a reduction in the trade deficit all contributed to the rupee’s resilience. Nevertheless, geopolitical concerns, particularly surrounding the Israel-Hamas conflict, had a dampening effect on investor confidence.
On the previous trading day, the rupee had slipped by 2 paise, settling at 83.26 against the US dollar.
Experts suggest that, at present, a mild risk-off stance is promoting demand for the US dollar. However, the rupee’s trading range is being upheld by optimistic economic data and interventions by the Reserve Bank of India (RBI), which is estimated to be between 83.05 and 83.30. The situation remains delicate, with the potential for rapid shifts in response to geopolitical developments. In the oil market, Brent crude futures, a global benchmark, saw a slight increase of 0.11% to reach $90.99 per barrel.
In the domestic equity market, the BSE Sensex was trading slightly lower by 24.70 points or 0.04%, standing at 66,258.04. The broader NSE Nifty exhibited a minimal decline of 1.65 points or 0.01%, reaching 19,749.40.
On the foreign investment front, Foreign Institutional Investors (FIIs) demonstrated a net buying trend in the capital markets on Friday, with shares worth ₹317.01 crore being purchased, according to exchange data.
Meanwhile, the Reserve Bank of India (RBI) reported a decrease in the country’s forex reserves by $2.166 billion to reach $584.742 billion for the week ending October 6.
According to government data released last Thursday, India’s retail inflation eased to a three-month low of 5% in September, while industrial production in August soared to a 14-month high of 10.4%.