Rupee resumes slide, tumbles 19 paise to 79.13 against USD

PTI, Jul 7, 2022, 7:53 PM IST

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Mumbai: Resuming its slide after a day’s pause, the rupee declined 19 paise to close at 79.13 against the US dollar on Thursday as a firm greenback overseas and unabated foreign capital outflows outweighed the impact of RBI’s measures to support the domestic currency.

At the interbank foreign exchange market, the rupee opened at 79.05 and shuttled between a high of 78.90 and a low of 79.26.

It finally settled at 79.13, down 19 paise over its previous close of 78.94.

The rupee had jumped 39 paise on Wednesday — its best single-day gain in over three months — after the RBI raised overseas borrowing limits for companies and liberalised norms for foreign investments in government bonds as it announced a slew of measures to boost foreign exchange inflows and curb the fall of the rupee, which has slumped to record lows against the US dollar in the past few sessions.

”Rupee opened on a flat note but started to come under pressure despite measures announced by the RBI,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

The central bank had also said it has been closely monitoring the liquidity conditions in the forex market and has stepped in as needed in all segments to alleviate dollar tightness with the objective of ensuring orderly market functioning.

Forex traders said the US Federal Reserve’s minutes of the meeting held last month indicated a hawkish stance and a rate hike of 75 basis points is likely in July. The minutes were released on Wednesday.

”Dollar rose against its major crosses after the minutes reaffirmed Fed’s intent to get prices under control to address stubborn inflation,” Somaiya said, adding, ”We expect the USD-INR to trade sideways but with a positive bias and quote in the range of 79.05 and 79.80.” The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading flat at 107.07.

Brent crude futures, the global oil benchmark, advanced 0.81 per cent to USD 101.51 per barrel.

On the domestic equity market front, the BSE Sensex ended 427.49 points or 0.80 per cent up at 54,178.46, while the broader NSE Nifty jumped 143.10 points or 0.89 per cent to 16,132.90.

Foreign institutional investors remained net sellers in the capital market on Thursday as they offloaded shares worth Rs 925.22 crore, as per stock exchange data.

According to Jateen Trivedi, VP Research Analyst at LKP Securities, RBI measures gave some respite to falling rupee but in material terms this would only keep the rupee short speculators away for some time.

”Rupee fall is more denominated by Crude rise and recent fall in Crude from USD 115 to USD 100 has helped rupee rise from 79.35 to 79.00,” Trivedi added.