The rupee started Monday weaker, losing 21 paise to 94.97 against the US dollar in early trade. A broadly stronger dollar in global markets weighed on the local currency.
Forex traders said the fall was kept in check by a firm domestic stock market and a drop in crude oil prices.
Opening and previous close
At the interbank foreign exchange market, the rupee opened at 94.90 and then slipped to 94.97. On Friday, it had ended the session at 94.76 against the dollar.
Analyst view
Anindya Banerjee, Head of Commodity and Currency Research at Kotak NEO, said the pair had ended October near 94.95. He said measures taken by the Reserve Bank of India and its market operations have helped keep volatility under control. The central bank’s reserves of around USD 720 billion provide further support, he added.
Banerjee said softer crude would help the rupee. A fresh rise in oil prices, however, would push the dollar-rupee pair towards the weaker end of its expected range for the rupee, he noted.
Dollar and oil
The dollar index, which tracks the US currency against a basket of six others, was trading at 101.94, up 0.07 per cent.
Brent crude, the global oil benchmark, fell 3.07 per cent to USD 109.95 per barrel in futures trade. For India, which imports most of its oil, lower crude prices usually ease pressure on the rupee.
Forex reserves
Data released by the RBI on Friday showed India’s foreign exchange reserves fell by USD 1.269 billion to USD 719.748 billion in the week ended October 30.
In the earlier reporting week ended October 16, the reserves had dropped by USD 5.011 billion to USD 721.016 billion.
Equities and foreign flows
Foreign institutional investors returned as net buyers on Friday, according to exchange data. They bought equities worth Rs 3,598.54 crore on a net basis.
The domestic equity market opened strongly on Monday. The Sensex jumped 764.72 points to 75,216.80 in early trade, while the Nifty rose 201.40 points to 23,255.90.
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