The rupee closed unchanged at 77.66 against the US dollar in muted trade on Monday as participants largely stayed on the sidelines ahead of the RBI’s policy decision later this week.
While the domestic unit gained initially amid a weak American currency in the overseas market, elevated crude oil prices, unabated foreign capital outflows and subdued domestic equities capped the appreciation bias, forex dealers said.
At the interbank forex market, the local unit opened slightly strong at 77.65 against the greenback and witnessed an intra-day high of 77.55 and a low of 77.67. It finally settled at 77.66, the same level as Friday’s closing rate.
On the domestic equity market front, the BSE Sensex ended 93.91 points or 0.17 per cent lower at 55,675.32, while the broader NSE Nifty slipped 14.75 points or 0.09 per cent to 16,569.55.
The dollar index, which measures the greenback’s strength against a basket of six currencies, fell 0.20 per cent to 101.93.
Brent crude futures, the global oil benchmark, rose 0.60 per cent to USD 120.44 per barrel.
Foreign institutional investors remained net sellers in the capital market, offloading shares worth Rs 2,397.65 crore on Monday, as per stock exchange data.
Meanwhile, the RBI’s rate-setting panel MPC on Monday began its three-day deliberations amid expectations of another hike in benchmark interest rates to contain inflation that continues to remain above the central bank’s upper tolerance level.
RBI Governor Shaktikanta Das will announce the decision of the Monetary Policy Committee (MPC) on Wednesday.
”Rupee continued to trade in a narrow range and marginal weakness was seen ahead of the RBI policy meeting that is scheduled this week. Expectation is that the central bank could look to raise rates but investors will be keenly watching governor’s commentary.
”The central bank could continue to maintain a hawkish stance, thereby restricting major losses for the rupee,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
”We expect the USDINR to trade with sideways and quote in the range of 77.40 and 78.05,” he added.
Dilip Parmar, Research Analyst, HDFC Securities, said the rupee remained in a narrow range with thin volumes ahead of the RBI policy decision.
”The market is already set for a rate hike as the 10 year benchmark bond yields settled at 7.5 per cent. Spot USD-INR is yet to give a four week range of 77.40 to 77.80. Near term bias remains cautious ahead of policy decisions,” he noted.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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