Rupee extends losses, declines 16 paise to 75.52

PTI Mumbai | Updated on October 12, 2021

The government’s lower borrowing plan for H2 has buoyed the bond markets   - Vostrikov

The domestic unit was weighed down by firm crude oil and a strong dollar overseas

Falling for the third day in a row, the rupee weakened further by 16 paise to end at 75.52 against the US currency on Tuesday, weighed down by a strong greenback in the overseas market and firm crude oil prices.

At the interbank foreign exchange market, the local currency opened at 75.41 and witnessed an intra-day high of 75.16 and a low of 75.66 against the US dollar in day trade.

The local unit finally settled at 75.52 a dollar, down 16 paise over its previous close.

On Monday, the rupee slid by 37 paise to close at a 15-month low of 75.36 against the US dollar.

In the last three trading sessions, the rupee has depreciated 73 paise against the US dollar.

Brent crude futures, the global oil benchmark, advanced 0.29 per cent to $83.89 per barrel.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02 per cent up at 94.33.

"The Indian rupee touched a low of 75.67, a level last seen on June 25, 2020. The dollar index stayed calm while dollar demand from oil importers and hedgers dragged the rupee lower. Market participants should keep an eye on crude oil, the Dollar index and US Treasury yields for short term movement," said Dilip Parmar, Research Analyst, HDFC Securities.

Parmar further said the medium-term trend for USD/INR remains bullish, while short-term profit booking can’t be ruled out after the vertical rise.

"The pair is having support in the area of 75.30 to 75, while continuing to face resistance in the range of 75.90 to 76," he noted.

On the domestic equity market front, the BSE Sensex ended 148.53 points or 0.25 per cent higher at 60,284.31, while the broader NSE Nifty advanced 46.00 points or 0.26 per cent to 17,991.95.

"The Indian Rupee depreciated against the US Dollar for a third successive session, weighed down by dollar demand from oil marketing companies, supported by an uptick in crude oil prices," said Sriram Iyer, Senior Research Analyst at Reliance Securities.

The unit had briefly weakened to 75.67 earlier in the session, its lowest since June 29, 2020, but trimmed losses on exporters' dollar sales and dollar positions covering by some foreign banks.

Most other Asian and emerging market currencies came under pressure this Tuesday, and continued to be weighed by the rise in crude prices.

India's benchmark BSE index ended 0.3 per cent higher, shrugging off weak global cues and kept the depreciation bias capped.

In the overseas markets, the dollar index was flat this Tuesday afternoon trade in Asia, ahead of the Federal Open Market Committee (FOMC) minutes and CPI data this week.

Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 1,303.22 crore, as per exchange data.


Published on October 12, 2021

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