MUMBAI: On Monday, the rupee lost 10 paise to settle at 82.31 (provisional) against the US dollar as the strong US dollar on the international market and high crude oil prices dampened investor mood.
The Indian rupee fell 10 paise from its previous closing of 82.21 to close at 82.31 (provisional) on the interbank foreign currency market. It had started off at 82.44 versus the US dollar.
The native currency had intraday highs of 82.31 and lows of 82.46 against the US dollar throughout the session.
The dollar index, which measures the value of the dollar against a basket of six different currencies, was trading 0.8% higher at 102.58.
Benchmark Brent crude futures increased by 5.28% to $84.11 per barrel.
Anuj Choudhary, a research analyst at Sharekhan by BNP Paribas, claims that the sluggish local market and a strong dollar are to blame for the rupee’s depreciation.
Concerns about inflation were rekindled as a result of the OPEC+ decision to reduce crude oil production, which also caused a dramatic increase in global crude oil prices.
Positive macroeconomic data buffered the downside, according to Choudhary. “Core PCE (Personal Consumption Expenditures) inflation indicated decreasing inflation in the US, bolstering anticipation that the US Federal Reserve may be reaching the end of its rate hike cycle.”
The S&P Global India Manufacturing Purchasing Managers’ Index (PMI), which measures operating conditions, increased from 55.3 in February to 56.4 in March.
Because of the strong dollar and the rise in crude oil prices, Choudhary predicted that the Indian rupee would trade in a way that would be detrimental to the global economic recovery.
Ahead of this week’s RBI monetary policy announcement and US jobs market report, investors are expected to exercise caution.
The RBI’s rate-setting panel began its three-day meeting on Monday amid speculation that the central bank could seek a 25 basis point increase in the benchmark interest rate, which would likely be the final one in the current cycle of monetary tightening that started in May 2022.
The broad NSE Nifty increased 38.30 points or 0.22 percent to 17,398.05 points, while the 30-share BSE Sensex finished 114.92 points or 0.19 percent higher at 59,106.44 points.
According to exchange data, Foreign Institutional Investors (FIIs) were net purchasers on Friday in the capital market, buying shares worth Rs 357.86 crore.