Image has been used for representational purpose only. , Photo credit: Raghunathan SR
Rupee It closed 18 paise lower at 82.85 (provisional) against the US dollar on May 22 owing to a stronger greenback in the overseas market.
Forex traders said a firming trend in the domestic equity market and fall in crude prices at the international market limited the rupee’s losses.
At the interbank foreign exchange, the domestic unit opened at 82.80 against the dollar and finally settled at 82.85 (provisional), down 18 paise from its previous close.
The rupee touched a high of 82.70 and a low of 82.85 against the dollar in day trade.
On May 19, the rupee had closed at 82.67 against the dollar.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.09% to 103.10.
Global oil benchmark Brent crude futures fell 0.16% to $75.46 a barrel.
The rupee today fell to its lowest level since February 2023 due to underlying strength in the greenback and dollar purchases by the RBI to shore up its forex reserves, said Anuj Chowdhary, research analyst at Sharekhan by BNP Paribas.
However, weakness in crude oil prices and positive domestic equities supported the decline. The US dollar declined slightly after Fed Chairman Jerome Powell’s dovish statement and stalled debt limit talks.
“We expect the rupee to trade with a negative bias on risk-off sentiments amid concerns over debt ceiling talks. However, crude oil prices are expected to decline further amid sluggish demand from China, The sharp fall in the rupee can be stopped.
“Dovish signal by Powell may also support rupee at lower levels. Market participants may remain cautious ahead of FOMC minutes this week. We expect USD/INR spot to trade in the range of 82.40 to 83.30 in the near term,” Mr. Chowdhary said.
On the domestic equity market front, the 30-share BSE Sensex advanced 234.00 points or 0.38% to close at 61,963.68. The broader NSE Nifty rose 111.00 points, or 0.61%, to 18,314.40.
Foreign institutional investors (FIIs) were net sellers in the capital market on May 19 as they sold shares worth ₹113.46 crore, according to exchange data.
Meanwhile, rising for the second consecutive week, India’s forex kitty increased by $3.553 billion to $599.529 billion for the week ended May 12, the RBI said on May 19.
The total reserves had increased by $7.196 billion to $595.976 billion in the previous week.