Noida, Oct 1 (APAC Media): The rupee slipped 3 paise to 95.97 against the US dollar in early trade on Thursday, weighed down by dollar demand from state-run oil companies, foreign fund outflows, and a stronger American currency.
The domestic unit opened at 95.95 against the US dollar in the interbank foreign exchange market and later quoted at 95.97, compared with Wednesday’s close of 95.94.
Dollar sales by state-run banks, reportedly on behalf of the Reserve Bank of India, helped limit the rupee’s decline and defend the 96-per-dollar level.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors, said the RBI supplied dollars through state-run banks in both spot and forward markets.
The dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.09 percent to 101.54. The index had gained nearly 2 percent in September and was close to a two-month high.
Anindya Banerjee, head of commodity and currency research at Kotak Securities, said the firm dollar was putting pressure on emerging-market currencies, including the rupee.
“A firm dollar is a headwind for gold, silver, and emerging market currencies, including the rupee,” Banerjee said.
In the domestic equity market, the Sensex declined 215 points to 72,257.30, while the Nifty fell 107.25 points to 22,518.90 in early trade.
Foreign institutional investors remained net sellers in Indian equities, selling shares worth Rs 10,148.41 crore on Wednesday, according to exchange data.
Meanwhile, Brent crude futures fell 1.18 percent to USD 96.87 a barrel. Lower crude prices offered some support to the rupee, although persistent dollar demand and foreign fund outflows continued to weigh on the currency.
Market participants are closely tracking movements in the US dollar, global bond yields, crude oil prices, and foreign capital flows for further direction in the rupee.
The RBI’s intervention through dollar sales also remains a key factor in containing volatility around the 96-per-dollar level.
–ENDS–
Disclaimer: This article is for informational purposes only and is based on publicly available information. APAC Media is not responsible for investment decisions or losses. Please conduct your own research or consult a financial adviser before investing.
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