The rupee depreciated by 45 paise, its steepest single-day decline since February 25, to close at 87.33 on Monday, pressured by dollar bids spurred by the maturity of positions in non-deliverable forwards (NDF) and a fall in the Chinese yuan. Despite the weakness in the dollar, demand for the greenback from oil companies amid volatile crude prices and a selloff in equities soured the sentiment.
“There was news in The New York Times on Friday that the Indian government had committed to buy $25 billion worth of crude oil from the US annually, with $2-billion purchase in March. Due to this, the rupee closed 87.20/$ in NDF market…” said a forex trader with a foreign bank.
ALSO READMonday pain: Selling continues in mid and smallcaps, Nifty ends below 22,500
At the interbank foreign exchange, the rupee opened weak at 87.24 and touched the day’s low of 87.36 amid an intense volatility. The unit touched an intraday high of 87.16 before ending at 87.33. “The RBI intervened for a short period at 87.35 levels, but it was not aggressive…” said a forex trader with a state-owned bank.
The dollar index, which measures the strength in the American currency against six peers other than the rupee, was trading 0.1% lower at 103.7.
On Friday, the rupee appreciated 17 paise to close at 86.95.
The decline on Monday came amid a weak trend in the equity markets, where the Sensex dropped 217.41 points, or 0.29%, to 74,115.17, while the Nifty fell 92.20 points, or 0.41%, to 22,460.30. On the global front, Brent crude prices rose 0.28% to $70.56 per barrel, further dampening the sentiment.
Foreign institutional investors offloaded equities worth Rs 2,035.10 crore on Friday, adding to the downward pressure on the rupee.
After Goldman Sachs, Nuvama cuts target price for BSE. 3 big worries are…
The dollar-rupee forward premiums rose, with the one-year implied yield rising 3 basis points to 2.14%, as traders awaited US and Indian inflation data due on Wednesday to gauge the future path of policy rates.
The rupee has been the worst-performing Asian currency this year amid persistent portfolio outflows and negative global factors. Union Bank of India in its report said in the first two months of 2025,
» Read More
