Rupee Closes At 71.73 Against Dollar, Breaks 7-Day Losing Streak
The rupee rose 26 points to close at 71.76 against the dollar on Friday. The rise in the rupee's value against the greenback came after seven days of depreciation. Suspected intervention by the Reserve Bank of India along with losses in the dollar overseas stopped the rupee from falling below the 72 level. Despite Friday's mild gain, the rupee finished the week 73 paise lower against the American currency. The rupee is still more than 12 per cent down against the dollar so far this year, making it the worst performing Asian currency.
Here are 10 things to know about movement in the rupee against US dollar:
1. The RBI intervenes anonymously in the forex market through banks, and publishes its forex reserves numbers with a time lag of a week. Typically traders can only estimate the intervention number from the weekly data.
2. "Once the global situation improves, the rupee will also stabilise. A combination of forex reserves and interest rate hike are sufficient at present to deal with the rupee depreciation," said Rushabh Maru, research analyst-currency and commodity, AnandRathi. Emerging market currencies have suffered a rout on concerns of higher crude prices and tariff wars, and crises in Argentina and Turkey have raised worries of a cascading impact across financial assets.
3. The central bank has likely been selling dollars through both private and state-run banks on the anonymous forex trading platform throughout on Friday, underscoring its intent to staunch losses in the rupee, news agency Reuters cited traders as saying.
4. "If the rupee depreciates further from current level, the RBI still has $400 billion worth of forex reserves," added Mr Maru.
5. The country's foreign exchange reserves stood at $400.101 billion, declining by $1.191 billion in the week to August 31, data from the Reserve Bank of India (RBI) showed.
6. Overseas, the US dollar moved in tight ranges against major peers. The dollar has gained considerably from global trade tensions but slipped off two-week highs this week.
7. Crude oil prices edged higher to trade at $76 a barrel levels in anticipation of tightening of supply. High crude oil prices continue to fuel worries on the current account deficit front.
8. Analysts say that crude imports are fuelling worries on the current account deficit front amid mild intervention from the central bank. India meets more than 80 per cent of oil requirements through imports.
9. Fuel prices in the country have increased to record levels in many cities. Petrol and diesel prices were on Friday raised by around 50 paise per litre across Delhi, Kolkata, Mumbai and Chennai, marking the steepest increase in more than 14 months.
10. Domestic stock markets closed higher for a second day, with the Sensex advancing 147 points to settle at 38,389.
(With agency inputs)
