Rupee closes below 80 for first time against USD, falls 13 paise

Mumbai: The rupee fell 13 paise to close below 80 for the first time against the US currency on Wednesday on strong demand for dollars from importers amid high crude oil prices. In the interbank foreign exchange market, the local currency opened at 79.91 and then slipped to a low of 80.05 to the dollar. The Rupee traded in a range of 79.89-80.05 in day trade. It eventually stabilized at the day’s low of 80.05, showing a loss of 13 paise from the previous close. On Tuesday, the Rupee recovered from its all-time low of 80.05 to close 6 paise higher at 79.92 against the US Dollar following currency inflows and suspected RBI intervention.

Currency traders said strong demand for dollars from oil importers, firm crude oil prices as well as worries about a ballooning trade deficit were weighing on investor sentiment. “Overall crude gains over the past few days where Brent rose again above USD 105 and lack of intervention from RBI kept the rupee hovering around 80.00. Going forward, the rupee will be between 79.75 and 80.25,” said Jateen Trivedi, VP Research Analyst at LKP Securities.

The rupiah is broadly in a downtrend even after RBI measures on international payment gateways or import duty hikes on commodities, Trivedi said. India’s foreign exchange reserves stood at $580.252 billion, down $27.05 billion from the end of March 2022.

“As the dollar index showed a correction from 109 to 106.50 in a week, which will keep the rupee lower for the most part,” he said. The dollar index, which gauges the strength of the greenback against a basket of six currencies, fell 0.11% to 106.56.

Brent futures, the global oil benchmark, fell 1.73% to $105.49 a barrel. On the domestic stock market front, the BSE Sensex ended 629.91 points or 1.15% higher at 55,397.53, while the broader NSE Nifty jumped 180.30 points or 1.1% to 16,520.85.

Foreign institutional investors remained net buyers in the capital market on Tuesday as they bought shares worth Rs 976.40 crore, according to exchange data.

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