Noida, Aug 17 (APAC Media): The rupee declined 17 paise to 95.59 against the US dollar in early trade on Monday, weighed down by concerns over the Reserve Bank of India’s decision to advance the deadline for its special FCNR(B) deposit swap facility.
The domestic currency had settled at 95.42 against the US dollar in the previous session.
Market sentiment turned cautious after the RBI brought forward the deadline for banks to access the concessional foreign-exchange swap facility linked to fresh Foreign Currency Non-Resident (Bank) deposits.
The facility, aimed at encouraging banks to mobilise fresh FCNR(B) deposits, was previously available until September 30. The deadline has now been advanced to August 31.
The move has raised concerns over the pace of foreign-currency inflows and added pressure on the rupee.
Traders said dollar demand from importers and movements in global crude oil prices could also influence the domestic currency during the session.
The rupee has remained under pressure amid external-sector uncertainties, although India’s sizeable foreign-exchange reserves provide the Reserve Bank with room to intervene in the currency market and contain excessive volatility.
Market participants will closely track the central bank’s foreign-exchange operations, overseas fund flows and global dollar movements for further cues on the rupee.
The domestic currency is likely to remain sensitive to changes in crude oil prices and dollar demand in the near term.
–ENDS–
Disclaimer: This article is for informational purposes only. APAC Media is not liable for any investment decisions or losses. Please conduct your own research or consult a financial advisor before investing.
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