Rupee Opens Flat Amid Pressures From Foreign Exodus And Geopolitical Tensions
The domestic unit opened flat at 84.49 against the US dollar after closing at 84.50 on Thursday, according to Bloomberg data.
The Indian rupee opened flat and continued to face pressure against the US dollar amid no signs of the selloff by global funds abating in the equity market.
The domestic unit opened flat at 84.49 against the US dollar after closing at 84.50 on Thursday, according to Bloomberg data. The currency hit a fresh record low of 84.50 against the greenback in the previous session as foreign investors kept selling Indian equities.
Global funds offloaded Rs 5,321 crore worth of equities on Thursday, taking the net tally to Rs 1.65 lakh crore in the last 37 sessions. Rising geopolitical tension amid the escalation of Russia-Ukraine also weighed on the currency.
Russia said it launched a new kind of ballistic missile into Ukraine a day after the latter fired British cruise missiles at military targets inside Russia. Russian President Vladimir Putin said that no system can counter new Russian missiles and that the US made a mistake ending the missile treaty.
This follows the decision by Joe Biden’s administration to approve Kyiv’s limited use of the weapons and President Vladimir Putin signing a decree allowing Russia to fire nuclear weapons.
The rupee slumped to an all-time low weighed down by a confluence of geopolitical and domestic pressures, according to Amit Pabari, managing director, CR Forex Advisors. Despite facing headwinds, the RBI is actively mitigating rupee depreciation by selling dollars in the NDF market, he said.
Planned capital inflows, including the RBI's plan to raise $2.36 billion through sovereign green bonds, further strengthen the rupee's position, Pabari said.
The dollar index, which tracks the performance of the greenback against a basket of 10 leading global currencies, was trading 0.03% higher at 107 as of 09:09 a.m. The dollar climbed against most major currencies on Thursday with the yen a standout exception.
International benchmark brent oil was priced 0.54% up at $74.63 per barrel, amid escalation tension on the geopolitical front. West Texas Intermediate settled 0.61% higher at $70.53 a barrel.
Rupee has depreciated 0.5% in November. It has managed to outperform most Asian currencies as RBI managed it with its huge reserves, according to Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.
