Mumbai, July 13
The rupee closed at a record closing low against the dollar on Wednesday in the backdrop of the greenback gaining strength against major currencies on expectations the US Fed may go for aggressive rate hikes to tackle price pressures.
Further, FPI equity outflows and demand for dollar from oil marketing companies weighed on the Indian unit.
The rupee closed about 3 paise lower at 79.63 per USD against previous close of 79.5975.
Opening stronger at 79.55 per USD, INR tested an intraday high and low of 79.53 and 79.68, respectively.
The central bank sold dollars at the intraday low level, resulting in recovery of the rupee, said a forex dealer with a public sector bank.
Amit Pabari, MD, CR Forex Advisors, said that broadly, a stronger USD amid Fed’s tightening and safe-haven demand due to recession fears could be warranting a caution.
“Thus, one can expect the USD-INR pair to steadily move higher toward 80-80.50 levels in the near term. On the flip side, immediate support lies at 79.20 and 78.90 levels,” he said.
G-sec prices up
Meanwhile, government securities (G-Sec) prices jumped on RBI Governor Shaktikanta Das’ latest comment that monetary policy is mindful of the economy’s growth needs.
Bond market players interpreted this statement to mean that the central bank may not be aggressive in its rate hikes.
Price of the 10-year benchmark G-Sec closed up about 35 paise at ₹94.6075 (previous close: ₹94.2550). Yield of this security declined about 5 basis points to close at 7.3376 per cent (7.3915 per cent).