In the morning session on Monday, the Indian rupee depreciated 4 paise to reach 83.15 against the US dollar, influenced by higher crude oil prices and increased dollar demand from importers. Forex traders observed the rupee maintaining a narrow range due to positive domestic equities being offset by foreign fund outflows. The rupee opened at 83.14 against the dollar and later declined to 83.15 at the interbank foreign exchange, marking a 4-paise decrease from the previous close.
On Thursday, the rupee experienced a marginal 1-paise increase, closing at 83.11 against the US dollar in a range-bound trade. The forex market remained closed on Friday due to Republic Day.
The dollar index, indicating the strength of the greenback against six currencies, recorded a 0.09% increase, reaching 103.52. Concurrently, brent crude futures, the global oil benchmark, showed a 0.47% rise, reaching $83.94 per barrel.
In the domestic equity market, the 30-share BSE Sensex demonstrated a 0.80% increase, trading at 71,267.66 points, while the broader NSE Nifty rose by 0.82%, reaching 21,527.75 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, offloading shares worth Rs 2,144.06 crore, according to exchange data.
On a different note, India’s forex reserves saw a notable increase of $1.634 billion, reaching $618.937 billion for the week ending January 12, as reported by the Reserve Bank of India (RBI) on Friday.
In conclusion, the rupee’s depreciation against the US dollar reflects the impact of elevated crude oil prices, dollar demand from importers, and cautious trading due to foreign fund outflows. The currency is influenced by a range of factors, including global economic conditions, domestic equities, and fluctuations in forex reserves. Traders remain vigilant amidst uncertainties, and the market responds to cues such as changes in the dollar index and global oil benchmarks. The recent surge in India’s forex reserves adds a positive note to the economic landscape. Overall, the dynamics of the forex market continue to evolve, shaping the trajectory of the rupee against the backdrop of both domestic and international variables.
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