On Tuesday, the rupee had closed at 79.78 against the US currency.
On Tuesday, the rupee had closed at 79.78 against the US currency.
The rupee on Wednesday closed 13 paise lower at 79.91 (provisional) against the US dollar, buoyed by overall firming in the greenback and expectations of an aggressive rate hike by the US Federal Reserve.
In the interbank forex market, the local currency opened at 79.83 and finally ended at 79.91, down 13 paise over its previous close.
On Tuesday, the rupee had closed at 79.78 against the US currency.
Research analyst Anuj Choudhary said, “The overall strength in the US dollar and concerns over the global economic recovery led to the devaluation of the Indian rupee. The IMF has lowered India’s FY23 GDP forecast to 7.4% from 8.2% in previous estimates.” did it, whose weight was also at Rs. Sharekhan by BNP Paribas.
Mr Choudhary further said that fresh outflows by FIIs also put pressure on the rupee. However, a positive trend in the domestic equity markets capped the downside.
“The rupee is expected to trade on a mixed to negative note on a stronger dollar and aggressive rate hike by US Federal Reserve is expected,” he said, adding that there are broad market expectations of a rate hike of 75 bps. A sudden 100 bps rate hike could trigger a rally in the dollar and put pressure on riskier assets,” Mr. Chowdhury said.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.19% to 106.98.
Global oil benchmark Brent crude futures fell 0.16% to $104.23 a barrel.
On the domestic equity market front, the BSE Sensex ended 547.83 points or 0.99% higher at 55,816.32, while the broader NSE Nifty jumped 157.95 points or 0.96% to end at 16,641.80.
Foreign institutional investors remained net sellers in the capital markets on Tuesday as they sold shares worth Rs 1,548.29 crore, according to exchange data.
The IMF on Tuesday slashed India’s growth rate by 0.8 percentage points to 7.4% for FY22, reflecting “mainly less favorable external conditions and more rapid policy tightening”.
The global economy, still grappling with the pandemic and Russia’s invasion of Ukraine, faces an increasingly gloomy and uncertain outlook, the IMF said in its July 2022 World Economic Outlook update released on Tuesday.
It forecasts the global economy to slow to 3.2% in 2022 from 6.1% last year.