The Indian rupee ended little changed against the US dollar on Thursday amid a flat American currency and ahead of the Reserve Bank of India’s (RBI) monetary policy outcome tomorrow. The rupee ended at 83.25 a dollar as against its previous close of 83.24.
The dollar index recovered after falling to a low of 106.5 earlier in the session and was last quoted at 106.8. The 10-year US treasury yield was also lower at 4.73%.
The RBI has been intermittently selling US dollars in the non-deliverable forwards, spot, and near-forwards markets to ensure the rupee does not breach the lifetime low of 83.29 hit in October 2022, Reuters reported.
While most Asian currencies gained due to softness in the dollar index early in the session, the rupee stayed under pressure due to US dollar demand from local oil companies and importers, traders told Reuters.
“The market is slowly pushing it (USD/INR) up,” said Anindya Banerjee, head of foreign exchange research at Kotak Securities, adding that once the 83.29-level breaks, the rupee may depreciate quickly towards 84.
Investors will now focus on the RBI monetary policy meeting outcome on Friday wherein the central bank is widely expected to keep repo rate unchanged, while the commentary on inflation and growth would be keenly watched.
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Falling crude oil prices and gains in domestic equity markets also supported the rupee.
Brent futures fell 0.97% to $84.98 a barrel, while US West Texas Intermediate crude (WTI) declined 1.12% to $83.28.
On the domestic front, the Indian stock market indices ended with decent gains on Thursday, snapping their two-day losing run amid mixed global cues ahead of the RBI policy outcome on Friday.
The Sensex ended 405.53 points, or 0.62%, higher at 65,631.57, while the Nifty 50 closed at 19,545.75, up 119.65 points, or 0.56%.
On Wednesday, the Foreign institutional investors (FIIs) net sold Indian shares worth ₹4,424.02 crore, while Domestic Institutional Investors (DIIs) net purchased shares to the tune of ₹1,769.49 crore, as per provisional data available on the exchanges.
(With inputs from Reuters)
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Updated: 05 Oct 2023, 04:10 PM IST