On Wednesday, the Indian rupee was mostly stuck in a range-bound movement and ended 2 paise down at 83.51 based on provisional data to the US dollar, showing a downfall in the INR vs USD rate. This happened amid a rise in prices of crude oil abroad and selling hysteria in domestic shares. The kingdom’s forex traders said that while the local unit was devalued, a weakening American currency and foreign investment helped to curb the decline.

Against this, at the interbank foreign exchange market, the rupee remained flat at 83.49 against the dollar. During the session, it oscillated merely within a band of 83.48 to 83.53. Finally, the rupee ended at 83.51 (provisional), which is 2 paise below the previous closing price in the INR vs USD rate. At the same time, the dollar index, which tracks the greenback against a half-dozen major currencies, declined by 0.03 percent to USD 104.77.

International crude oil prices edged up slightly. Hence the Brent crude oil index, which is the benchmark for the price of international oil, gained 0.22 percent to USD 84.85 per barrel in future trading. This hike was the main reason for the pressure on the rupee because India imports a lot of crude oil.

In the domestic equity market, the BSE’s 30-Sensex plummeted with a decline of 426.87 points or 0.53 percent to close the week at 79,924.77. Even the broader 50-share NSE Nifty edged lower, shedding 108.75 points or 0.45 percent, after which it closed the session at 24,324.45. These declines held in the equity markets were in line with other investors who were equally selling their stocks.

However, there were positive signs regarding the FDI in the given conditions. Fax data depicts that FIIs or Foreign Institutional Investors were net purchasers in the capital markets on Tuesday by acquiring stocks worth Rs 314.46 crore. This seemed to support the position that the arrival of foreign funds assisted in putting a lid on the losses incurred in the rupee.

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