Rupee Near 96 Against Dollar Amid Oil Prices and Fund Outflows
The Indian rupee remained under pressure on Monday, hovering near the 96 mark against the US dollar. This weakness was driven by higher crude oil prices and ongoing foreign fund outflows. Forex traders noted that the Reserve Bank of India (RBI) had intervened periodically to curb excessive volatility, but the overall macroeconomic environment weighed on the rupee's performance.
The rupee opened at 96.20 and later slipped to 96.26, marking a slight decline from its previous close. On Thursday, it had breached the 96-per-dollar level for the first time in over two months. Analysts predict an upward bias for the USD/INR pair, with factors like oil prices above USD 100 and high US yields influencing the trend.
The RBI's reserves dropped by USD 18 billion to USD 748 billion, reflecting its efforts to defend the rupee. The central bank's monetary policy committee is set to meet this week, with economists expecting a 25-basis-point interest rate hike to 5.50 percent. Key triggers for the USD/INR pair include US services data, the Fed minutes, and the RBI's decision on Wednesday.
Meanwhile, the dollar index rose by 0.54 percent to 102.47, while Brent crude futures fell 0.89 percent to USD 101.34 per barrel. Foreign Institutional Investors sold equities worth Rs 9,484.22 crore on Thursday. On the domestic equity front, the Sensex climbed 413 points to 72,315, and the Nifty gained 131.55 points to 22,554.20.