Rupee falls 24 paise against US dollar

The rupee fell 24 paise to close at 82.63 against the US dollar on Monday, weighed down by the strength of the American currency against major rivals and rising crude prices in the international markets.

At the interbank foreign exchange, the domestic unit opened at 82.47 against the dollar, and finally settled at 82.63, down 24 paise from its previous close.

During the day, the rupee touched a high of 82.45 and a low of 82.68 against the greenback.

On Friday, the rupee had settled at 82.39 against the dollar.

According to Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas, the rupee depreciated on a strong dollar and surge in crude oil prices.

FIIs have remained as net sellers in the past two sessions. However, upbeat economic data from India and positive domestic markets cushioned the downside, Choudhary said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.24 per cent to 104.26.

Brent crude futures, the global oil benchmark, advanced 1.62 per cent to USD 77.36 per barrel.

According to Dilip Parmar, Research Analyst, HDFC Securities, the rupee registered the worst day after March 14 amid weaker regional currencies after a surge in the US dollar backed by the upbeat US job data.

The interest rate pause from the RBI is also set to weigh on the currency as a narrow interest rate differential disincentivising investors, Parmar said.

The dollar demand from oil importers surged after crude oil prices recovered from a multi-month low as Saudi Arabia pledged a production cut at the OPEC+ summit.

Short-term volatility is expected to surge ahead of the RBI meeting this week.

''Spot USD/INR has strong support at 82.22 (100-day simple moving average) and resistance at 82.95, the current year high,'' Parmar said.

On the domestic equity market front, the 30-share BSE Sensex closed 240.36 points or 0.38 per cent higher at 62,787.47 points. The broader NSE Nifty advanced 59.75 points or 0.32 per cent to 18,593.85 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday as they offloaded shares worth Rs 700.98 crore, according to exchange data.

Foreign Portfolio Investors (FPIs) pumped in Rs 43,838 crore in Indian equities in May, the highest level in nine months, supported by strong macroeconomic fundamentals, and reasonable valuations.

Meanwhile, India's forex reserves dropped by USD 4.339 billion to USD 589.138 billion for the week ended May 26, the Reserve Bank said on Friday. In the previous week, the reserves had declined by USD 6.052 billion to USD 593.477 billion.

''We expect the rupee to trade with a negative bias in the near-term on surge in the US Dollar and overnight surge in crude oil prices due to a voluntary output cut by Saudi Arabia.

''However, a rise in risk appetite in global markets amid the US lifting its debt-ceiling bill and upbeat Chinese data may support Rupee at lower levels. Positive PMI data from India may also support Rupee,'' Choudhary said.

Market participants may remain vigilant ahead of the RBI’s monetary policy later this week. RBI is expected to leave the repo rate unchanged at 6.5 per cent. We expect the USD/INR spot to trade between 82.25 to 83 in the near term.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)