MUMBAI, May 13: The rupee consolidated in a narrow range and settled for the day lower by 1 paisa at 83.52 (provisional) against US dollar on Monday, as the support from positive domestic equities was negated by strong American currency.
Forex traders said with foreign investors buying US dollars and the Reserve Bank of India (RBI) selling the greenback, the USD/INR pair is expected to remain range-bound with a bit of a weakness bias.
At the interbank foreign exchange market, the local unit traded in a narrow range. It opened at 83.51, and touched an intraday low of 83.53 during the day. The domestic unit finally settled for the day at 83.52 (provisional), down 1 paisa from its previous close.
On Friday, the rupee closed at 83.51 against the American currency.
“We expect the rupee to trade with a slight negative bias on the strong US dollar and weakness in the domestic markets. Continued selling by FIIs may further pressure the rupee. However, any bond-related dollar inflows may support the rupee at lower levels,” said Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas.
Traders may take cues from India’s inflation data. Investors may remain cautious ahead of inflation data from the US this week. USDINR spot price is expected to trade in a range of Rs 83.30-83.80, Choudhary added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 105.27, marginally lower by 0.02 per cent.
Brent crude futures, the global oil benchmark, rose 0.12 per cent to USD 82.89 per barrel.
On the domestic equity market, the 30-share BSE Sensex advanced 111.66 points, or 0.15 per cent, to close at 72,776.13 points. The broader NSE Nifty settled 48.85 points, or 0.22 per cent higher, at 22,104.05.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth Rs 2,117.50 crore, according to exchange data.
Meanwhile, after three consecutive weeks of drop, India’s forex reserves increased USD 3.668 billion to USD 641.59 billion for the week ended May 3, the RBI said on Friday.
The overall kitty dropped USD 2.412 billion to USD 637.922 billion for the previous week ended April 26.
On the macroeconomic front, India’s industrial production growth slowed marginally to 4.9 per cent month-on-month in March 2024, mainly due to poor show by the mining sector, according to official data released on Friday.
The factory output growth, measured in terms of the Index of Industrial Production (IIP), was 5.6 per cent in February 2024. (PTI)
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