The morning session on Thursday witnessed the rupee opening on a steady note against the US dollar, reflecting a subdued trend in the domestic equities market. Forex traders noted the rupee’s constrained movement, attributing it to factors like elevated crude oil prices, a robust American currency, and continuous foreign fund outflows that have dampened market sentiments.
At the interbank foreign exchange, the rupee initiated trading at 83.13 against the dollar, with an early high of 83.11 and a low of 83.14. This comes after Wednesday’s closing at 83.12 against the US dollar. The liquidity deficit in India has expanded to Rs 3.34 trillion (USD 40.18 billion) as of January, posing limitations on the Reserve Bank of India’s ability to allow the rupee to appreciate towards its fair value.
Simultaneously, Brent crude futures, the global oil benchmark, showed a 0.31% uptick, reaching USD 80.29 per barrel. The dollar index, measuring the greenback’s strength against a basket of six currencies, observed a marginal increase of 0.08%, standing at 103.32.
In the domestic stock market, the 30-share BSE Sensex experienced a decline of 208.38 points or 0.29%, reaching 70,851.93 points. The broader NSE Nifty also faced a dip, down by 37.95 points or 0.18%, settling at 21,416.00 points.
Foreign Institutional Investors (FIIs) displayed net selling activity in the capital markets on Wednesday, offloading shares worth Rs 6,934.93 crore, as indicated by exchange data.
As the rupee navigates these influences, market participants remain watchful of global economic factors and domestic developments that could shape its trajectory in the coming sessions. The complex interplay of geopolitical events and economic indicators will likely continue influencing currency movements in the near term.
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