The rupee fell to an all-time low of 54.56 against the dollar during afternoon trade on May 16, 2012, even as the Reserve Bank of India broke its silence on the falling rupee, saying it would “do everything in its power to contain variability”. in Recent Delhi, May 16, 2012. Photo: | Photo credit: VV Krishnan
At the start of trade on May 7, the rupee traded in a narrow range against the US currency and appreciated by 4 paise to 83.48 against the US dollar on the back of positive trend in domestic equities.
Forex traders said the strength of the US currency in the overseas market, elevated oil prices and outflow of foreign funds weighed on the local unit and restricted the upward movement.
At the interbank forex market, the local unit opened at 83.48 against the dollar, registering an boost of 4 paise over the previous close.
On May 6, the rupee fell by 7 paise to 83.52 against the US dollar.
“India’s consistently forceful economic fundamentals, coupled with significant foreign exchange reserves acting as a safety net, enable the Reserve Bank of India to effectively mitigate any downward pressure on the rupee,” CR Forex Advisors CEO Amit Pabari said.
Moreover, a significant inflow of foreign direct investment (FDI) is expected. The Adani Group plans to raise $600 million through offshore loans, while Belstar Microfinance plans to raise $150 million through an initial public offering.
“Considering these factors, the rupee price is capped at 83.60. However, it is expected to rise to around 83 to 83.20 in the near term and the medium-term appreciation is expected to be in the range of 82.80 to 82.50,” Pabari said.
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, was trading at 105.18, up 0.13%.
Brent crude futures, the global crude oil benchmark, rose 0.29% to $83.57 a barrel.
In the domestic equity market, the 30-share BSE Sensex rose 19.43 points or 0.03% to 73,914.97 in the early session. The NSE Nifty index rose 19.90 points or 0.09% to 22,462.60 points.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Monday, withdrawing shares worth ₹ 2,168.75 crore, exchange data showed.