Rupee drops 7 paise to 75.03 following demand for dollars at end of month

The rupee weakened 7 peas to end at 75.03 against the US dollar on Wednesday due to dollar demand from importers at the end of the month and a moderate trend in domestic stocks.

A stronger dollar in foreign markets and suspected RBI intervention ahead of IPOs also weighed on the local unit, analysts said.

The Indian rupee depreciated following month-end demand for the dollar and a stronger greenback against major currencies. Weak Asian currencies and feelings of risk aversion weighed on the local unit, ” said Dilip Parmar, research analyst, HDFC Securities.

“Going forward, the rupee is expected to consolidate between 74.70 and 75.30 following forecasts of an influx of funds from a series of IPOs starting tomorrow,” Parmar added.

In the interbank foreign exchange market, the local currency opened at 75.02 and then experienced a high of 74.90 and a low of 75.05 against the US dollar in daytime trading.

The rupee eventually settled at 75.03 per dollar, down 7 peas from its previous close of 74.96 against the US dollar.

The dollar index, which measures the strength of the greenback against a basket of six currencies, was trading 0.02% at 93.97.

“Another lackluster day in USDINR as primary market REIT flows offset by suspected RBI intervention and demand for US dollars from oil trading companies,” said Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.

Banerjee further stated that “in the near term, IPO-related REIT flows will remain large and that with carry trade the USDINR could remain capped near 75.20 / 25″. But strong intervention from the US dollar index and the RBI can prevent a sharp drop. Therefore, a range of 74.75 to 75.25 could unfold in the near term. ” ” Currency traders are monitoring ECB policy cautiously, a moderately accommodating tone will activate dollar bulls. But his involvement on the USDINR spot will be limited as we have IPO subscriptions this week, ” according to Emkay Global Financial Services.

At the USDINR spot, ” we expect immediate resistance around 75.30, a breakout of which may push prices towards the 75.50 area. While 74.75-74.50 will act as crucial support, ” he noted. Oil prices eased in global markets, with benchmark Brent crude falling 1.08% to $ 85.47 per barrel.

On the national stock market front, the BSE Sensex ended down 206.93 points or 0.34% to 61,143.33 while the broader NSE Nifty index lost 57.45 points or 0.31 % to 18,210.95.

Foreign institutional investors were net sellers in the capital market on Tuesday as they dumped shares worth Rs 2,368.66 crore, exchange data showed.

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

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