In early Monday trade, the Indian rupee held steady at 83.26 against the US dollar amidst a negative trend in domestic equities and sustained demand for dollars from importers. Opening slightly higher at 83.24 against the dollar, a marginal increase from the previous close of 83.27, the rupee faced headwinds despite a weakening dollar index, which dipped 0.36% to 103.54.
While the dollar’s decline was evident in the index hitting a two-month low, factors such as foreign fund outflows and escalating crude oil prices influenced investor sentiments. Brent crude futures, the global oil benchmark, rose by 0.86% to $81.30 per barrel, adding to the challenges faced by the rupee.
On the domestic front, the equity market experienced a dip, with the BSE Sensex declining by 207.21 points (0.31%) to 65,587.52 points. The NSE Nifty 50 also traded lower, down by 43.10 points (0.22%) at 19,688.70 points. This negative trend in the stock market contributed to the overall cautious outlook.
In addition to the economic indicators, the Reserve Bank of India reported a decrease in India’s foreign exchange reserves by $462 million to $590.321 billion for the week ending November 10. The decline in the forex kitty highlighted potential economic challenges and added to the overall economic landscape.
Foreign Institutional Investors (FIIs) emerged as net sellers in the capital markets on Friday, offloading shares worth ₹477.76 crore, as per exchange data. This sell-off by FIIs contributed to the pressure on the Indian financial markets.
The confluence of global and domestic factors underscores the intricacies influencing the rupee’s trajectory, highlighting the need for a nuanced approach in navigating the complexities of the current economic landscape.
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