Rupee Opens Flat Amid Heightened Dollar Demand
The rupee depreciated by 1 paisa to open at 83.65 against the US dollar, according to Bloomberg data.
The Indian rupee opened little changed against the US dollar on Friday amid heightened dollar demand by importers looking to settle payments.
The rupee depreciated by 1 paisa to open at 83.65 against the US dollar, according to Bloomberg data. The local currency had closed at Rs 83.64 on Thursday.
Stocks in the Asia-Pacific region extended their gain on Friday on China's fiscal spending ambitions and as resilient US jobs data affirmed the Fed's soft landing target.
After reaching a notable high of 83.44, the Indian rupee has again retraced to 83.65. This drop comes in spite of a number of supportive factors—most notably, foreign inflows into Indian markets amounting to Rs 84,372 crore in September alone, said Amit Pabari, managing director at CR Forex Advisors.
With the Nifty and Sensex surging to all-time highs, and a strengthening trend across Asian currencies, including the Chinese Yuan nearing the 7.01 mark, the rupee was expected to perform better, he said. "Despite the positive bias seen since the US Federal Reserve’s recent 50 basis point rate cut, the rupee has struggled to sustain behind the crucial support level of 83.50."
Adding to this, the Reserve Bank of India likely intervened by absorbing excess dollar inflows, a move aimed at curbing excessive rupee appreciation, he said.
Oil prices continued their significant two-day decline as brent dropped by 0.42% to $71.30 amid expectations of increased supply from OPEC members Saudi Arabia and Libya. Meanwhile, a stronger dollar was up 0.09% at 100.66, putting additional pressure on commodities like oil.
"The USD/INR is finding solid support around 83.50, with the potential to rise toward the 83.75–83.80 range," stated Pabari. "For those who missed earlier selling opportunities, this range may present another chance."
