The Indian rupee faced a slight setback on Tuesday, depreciating by 4 paise to close at 83.43 against the US dollar. The currency’s performance was influenced by a robust dollar and elevated crude oil prices, which weighed down investor sentiments.
Beginning the day at 83.37 against the greenback, the rupee oscillated between an intraday high of 83.34 and a low of 83.44, before settling at 83.43, marking a marginal decline compared to its previous close. Last Thursday, the rupee had depreciated by 6 paise to settle at 83.39 against the US dollar.
The forex market remained closed on Friday and Monday due to ‘Good Friday’ and the annual account closing of banks, respectively.
A news agency quoted Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, who anticipated a slight negative bias for the rupee due to the strength of the US dollar and a subdued domestic market sentiment. Additionally, rising crude oil prices were expected to further burden the domestic currency.
Looking ahead, traders were expected to monitor cues from the Job Openings and Labor Turnover Survey (JOLTS) and speeches by various US Federal Reserve officials. Choudhary suggested that the USD/INR spot price might fluctuate within the range of Rs 83.20 to Rs 83.60.
Meanwhile, the dollar index, measuring the greenback’s strength against a basket of six currencies, traded slightly lower at 104.96. Brent crude futures, the global oil benchmark, surged by 1.78 percent to USD 88.98 per barrel.
On the domestic front, the equity market witnessed a decline, with the Sensex falling by 110.64 points to settle at 73,903.91 points, while the Nifty dropped by 8.70 points to close at 22,453.30 points. Foreign institutional investors (FIIs) were net sellers in the capital markets on Monday, offloading shares worth Rs 522.30 crore.
Meanwhile, India’s forex reserves reached an all-time high of USD 642.631 billion during the week ended March 22, marking the fifth consecutive week of increase. The Reserve Bank of India (RBI) reported a rise of USD 140 million compared to the previous week.
Additionally, India’s manufacturing sector witnessed robust growth in March, reaching a 16-year high, according to the HSBC India Manufacturing Purchasing Managers’ Index (PMI). The sector experienced a surge in new orders, output, and job creation amidst buoyant demand conditions.
Furthermore, GST collections in March recorded a growth of 11.5 percent, amounting to Rs 1.78 lakh crore, driven by higher domestic sales.
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