Rupee falls 7 paise to settle at ₹83.45 against US dollar
Upstox
3 min read • Updated: April 30, 2024, 3:08 PM
Summary
The Indian rupee weakened slightly against the US dollar on Monday. Investors remained cautious ahead of a key interest rate decision by the US Federal Reserve later this week. This cautiousness outweighed positive developments in the domestic market, such as a strong performance by the Sensex stock index and a decline in global crude oil prices.
The rupee declined by 7 paise to close at ₹83.45 against the US dollar on Monday as investors remained cautious ahead of the US Federal Reserve's monetary policy decision.
A robust sentiment in the domestic equity market and softening crude prices in the international market, however, cushioned the downfall in the Indian currency, forex traders said.
At the interbank foreign exchange market, the local unit opened weak at ₹83.39 and touched the intra-day low of ₹83.51 against the greenback during the session. The domestic currency finally settled at ₹83.45 against the dollar, registering a loss of 7 paise compared to its previous closing level.
On Friday, the rupee had declined 10 paise to close at ₹83.38 against the US dollar. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.26% to 105.53.
The weakness in the dollar was attributed to investors' cautious approach ahead of the US Federal Reserve's monetary policy and global as well as domestic macroeconomic numbers to be released this week. The Federal Open Market Committee (FOMC) meeting will begin on Tuesday and the interest rate decision is expected to be announced on May 1.
As per experts, Indian rupee fell on Monday on positive US dollar in early trades and sustained FII outflows. However, positive domestic equities and softening crude oil prices cushioned the downside.
Brent crude futures, the global oil benchmark, declined 0.53% to USD 89.03 per barrel.
Expert believe crude oil demand is expected to face challenges from the US due to renewed inflationary fear.
On the other hand, he said, the geopolitical risks appear to have eased considerably, removing some of the risk premium priced into the market.
On the domestic equity market front, Sensex jumped 941.12 points, or 1.28%, to settle at 74,671.28, and Nifty soared 223.45 points, or 1.00%, to close at 22,643.40. With elections underway, rupee volatility is expected to persist. Looking ahead, significant events this week include the US interest rate decision on Wednesday night and the US non-farm payroll and unemployment data on Friday evening. These events are likely to provide fresh triggers for both the dollar index and the rupee."
Foreign institutional investors (FIIs) were net buyers in the capital markets on Monday, as they purchased shares worth ₹169.09 crore on net basis, according to exchange data. Meanwhile, India's forex reserves decreased USD 2.282 billion to USD 640.334 billion for the seven days ended April 19 -- the second consecutive week of drop in the kitty, the Reserve Bank of India (RBI) said on Friday.