Market participants said that the Indian currency did not depreciate further as the Reserve Bank of India intervened in the foreign exchange market by selling dollars
Anjali Kumari Mumbai
The rupee depreciated to a new record low on Monday tracking the fall in the Chinese Yuan, said dealers. The local currency settled at a new closing low of Rs 83.67 against the US dollar, after touching an intra-day low of Rs 83.68 per dollar during the day.
On Friday, the rupee settled at Rs 83.66 per dollar.
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The Chinese Yuan weakened after the People’s Bank of China lowered the seven-day reverse repo rate from 1.8 per cent to 1.7 per cent, citing improved open market operations and support for the real economy.
Market participants said that the Indian currency did not depreciate further as the Reserve Bank of India intervened in the foreign exchange market by selling dollars.
“Indian rupee remained largely range-bound as it moved between Rs 83.64 a dollar to Rs 83.68 per dollar without offering any direction,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, while adding there was domestic demand for the dollar despite the overnight weakening dollar index.
A weakening greenback and the fall in crude oil prices helped the Indian unit from further depreciating.
The dollar index eased slightly to 104.23, against 104.39 on Friday, following President Biden’s decision to withdraw from the presidential race, clearing the path for the appointment of a new candidate to face the Republican nominee Donald Trump.
Brent crude oil prices fell to $82.91 per barrel, against $84.98 per barrel on Friday, as investors expected the US Federal Reserve to cut rates as soon as September.
Traders eyed the Union Budget on Tuesday for further cues on the rupee.
“The upcoming Union Budget tomorrow is expected to provide a strong outlook for the rupee, as it will outline India’s income and expenditure roadmap for the next year. The rupee remains broadly range-bound between Rs 83.25 a dollar and Rs 83.80 per dollar,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
The rupee has depreciated 0.5 per cent in 2024 and 0.3 per cent in July.
