Rupee trades in narrow range against U.S. dollar in early trade

The rupee witnessed range-bound trade and depreciated 2 paise to 84.07 against the U.S. dollar in initial deals on Tuesday (October 15, 2024), weighed down by significant foreign fund outflows, elevated crude oil prices and the strength of the American currency in the overseas market.

Forex traders said the rupee is trading in a narrow range as the support from positive domestic equities is being negated by foreign fund outflows. Moreover, crude oil prices have also surged by 10%, ballooning India’s already worrisome trade deficit.

At the interbank foreign exchange, the rupee opened at 84.06 against the greenback and traded in a tight range. In the initial trade, it touched 84.07, registering a fall of 7 paise over its previous close.

On Monday (October 14, 2024), the rupee recovered from its all-time low levels and appreciated 5 paise to close at 84.05 against the U.S. dollar.

Indian rupee was stable on Monday (October 14, 2024) as the Reserve Bank of India (RBI) supported it near to 84.08 levels, however, consistent U.S. dollar bids from FPIs and oil companies weighed on the local unit, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

“Rupee would open flat but the watch will remain on what the RBI does to protect it,” Mr. Bhansali added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05% lower at 103.25.

Brent crude, the global oil benchmark, declined 2.89% to $75.22 per barrel.

On the domestic equity market front, Sensex advanced 222.53 points, or 0.27%, to 82,195.58 points. The Nifty rose 57.85 points, or 0.23%, to 25,185.80 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Monday (October 14, 2024), as they offloaded shares worth ₹3,731.59 crore, according to exchange data.

On the domestic macroeconomic front, soaring vegetable prices pushed the retail inflation rate to a nine-month high of 5.49% in September, according to government data released on Monday (October 14, 2024).

The consumer price index (CPI) – based retail inflation was 3.65% in August and 5.02% in September 2023. The previous high inflation rate was witnessed in December 2023 at 5.69%.

Published - October 15, 2024 12:22 pm IST

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