Rupee Struggles Amid Strong Dollar and Climbing Crude Prices

The rupee depreciated by 14 paise to 83.57 against the US dollar on Wednesday, influenced by a robust American currency and rising crude oil prices. Domestic equities' uptrend provided some support. Analysts expect slight negative bias for the rupee due to dollar demand from oil importers.

On Wednesday, the rupee depreciated by 14 paise against the US dollar, settling at 83.57. The decline was attributed to the American currency gaining strength in the overseas market and rising crude oil prices.

However, robust domestic equities, with benchmark indices reaching new highs, offered some support to the local currency, according to forex traders.

The rupee opened at 83.45 and fluctuated between an intraday high of 83.43 and a low of 83.61, eventually closing 14 paise lower than its previous close at 83.57. On Tuesday, the rupee had appreciated by 4 paise, closing at 83.43.

Anuj Choudhary, a Research Analyst at Sharekhan by BNP Paribas, indicated that the rupee might trade with a slight negative bias due to dollar demand from oil importers as the end of the month approaches. A strong dollar and elevated crude oil prices could also exert downward pressure on the rupee.

Nonetheless, Choudhary noted that positive domestic markets and foreign institutional investor (FII) inflows might provide some support to the rupee. He predicted that the USDINR spot price would trade within the range of Rs 83.30 to Rs 84.

During the session, the dollar index, which measures the greenback's strength against a basket of six currencies, rose by 0.22 percent to 105.83. Brent crude futures, the global oil benchmark, also increased by 0.80 percent, trading at USD 85.69 per barrel.

In the domestic equity market, the 30-share BSE Sensex climbed 620.73 points, or 0.80 percent, to close at a new high of 78,674.25 points. Similarly, the broader NSE Nifty rose by 147.50 points, or 0.62 percent, to a record 23,868.80 points.

Despite these gains, FIIs were net sellers in the capital markets on Wednesday, offloading shares worth Rs 3,535.43 crore, as per exchange data.

Meanwhile, Reserve Bank Governor Shaktikanta Das stated on Tuesday that high interest rates are not hindering growth. He emphasized that monetary policy will continue to focus on reducing inflation. Speaking at an event organized by the Bombay Chamber of Commerce and Industry, Das remarked that the country is on the cusp of a significant structural shift in its growth trajectory, moving towards a sustained path of 8 percent real GDP growth annually.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)