Image used for representational purposes only. | Photo source: Reuters
The rupee depreciated by 10 paise to 83.50 against the US dollar in early trade on June 10, mainly due to a rise in the dollar index and US yields.
Forex traders said uncertainty among market participants eased after Narendra Modi was sworn in as prime minister for a record third term on Sunday. However, the strength of the US currency in the international market weighed on the local unit.
At the interbank forex market, the local unit opened at 83.48 and continued to lose ground, trading at 83.50 against the dollar, registering a loss of 10 paise from its previous closing level.
On Friday, the rupee strengthened by 13 paise to 83.40 against the US dollar.
According to Anil Kumar Bhansali, director treasury and executive director of Finrex Treasury Advisors LLP, the rupee opened at 83.50 mainly due to rise in the dollar index and US yields.
“The Reserve Bank of India (RBI) should be there to protect the rupee as the existing government policies will be continued largely by the same cabinet as Modi-2.0,” Bhansali said.
Prime Minister Modi will head the 72-member Union Cabinet, emphasizing continuity, youth and experience while rewarding partners in the BJP-led National Democratic Alliance (NDA) government.
Along with Prime Minister Modi, senior BJP leaders including Rajnath Singh, Amit Shah, Nitin Gadkari, Nirmala Sitharaman and S. Jaishankar, all ministers in the Modi 2.0 government, took oath as ministers at the Rashtrapati Bhavan.
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, was trading at 105.18, up 0.29%.
Brent crude futures, the global crude oil benchmark, rose 0.31% to $79.87 a barrel.
In the domestic equity market, both benchmark indices Sensex and Nifty touched record high levels in early trade. The 30-share BSE Sensex was trading 292.08 points or 0.38% higher at 76,985.44 points. The broader NSE Nifty index was trading at 23,291.50 points.
Foreign institutional investors (FIIs) were net buyers in the capital markets on Friday, buying shares worth ₹ 4,391.02 crore, exchange data showed.
Meanwhile, India’s foreign exchange reserves rose by $4.837 billion to reach a up-to-date record high of $651.51 billion in the week ended May 31, the RBI said on Friday.
In the previous reporting week, total reserves decreased from $2.027 billion to $646.673 billion.
