Rupee Struggles Against Dollar Amidst Market Volatility

The Indian rupee dropped by 15 paise against the US dollar to 84.44 due to muted domestic equity trends. The decline was curbed by a fall in the dollar and Brent crude indexes. With liquidity at a deficit from GST payments and RBI market interventions, the rupee remains volatile.

The Indian rupee experienced a significant drop of 15 paise against the US dollar, setting its rate at 84.44 in early Wednesday trading. The decrease closely linked to lackluster trends in the local equity markets, caused concern among market participants and observers.

Despite the sharp decline, mitigating factors like the dip in the dollar index and a marginal reduction in Brent crude prices helped stabilize the rupee and prevented more extensive losses. The forex market remained vigilant as these elements played a crucial role in maintaining the rupee's current standing.

Moreover, the Indian banking system faced liquidity challenges, exacerbated by large GST payments totaling Rs 1.6-1.8 lakh crore, pushing liquidity into deficit for the first time in months. Experts, including Anil Kumar Bhansali of Finrex Treasury Advisors, anticipate the rupee to hover between 84.00 and 84.50 as the market awaits crucial data from the US.

(With inputs from agencies.)