Rupee Falls on RBI's FCNR Deadline Move
The Indian rupee began the week on a negative note, depreciating by 17 paise to 95.59 against the US dollar in early trade. This decline comes as investor sentiment turned cautious following the Reserve Bank of India's decision to bring forward the cut-off date for its concessional FCNR (B) deposit swap facility.
The RBI had introduced this facility to encourage foreign currency inflows, and it has already attracted $56.84 billion as of August 13. However, with the new deadline set at August 31, investors are now looking beyond this temporary support.
CR Forex Advisors MD Amit Pabari said that while the inflows provided significant support to the rupee, 'the market will eventually begin looking beyond this temporary cushion.' He added that technically, the 95.20-95.30 zone is likely to act as an important support area, and as long as this level holds, USD/INR could gradually move towards the 96.20-96.50 region in the coming days.
The dollar index was at 99.54, down 0.12 per cent, while Brent crude rose 0.47 per cent to $88.94 per barrel in futures trade. Domestic equities also opened lower, with Sensex declining 284.85 points to 77,717.05 and Nifty falling 69.25 points to 24,297.05.