Mumbai, The rupee on Wednesday fell 42 paise to close at 84.77 against the US dollar amid heightened cross-border tensions following India’s military strikes on terror camps in Pakistan and Pakistan-occupied Kashmir. Indian armed forces on Wednesday morning carried out missile strikes on nine terror camps in Pakistan and Pakistan-occupied Kashmir, including Jaish-e-Mohammed’s stronghold Bahawalpur and Lashkar-e-Taiba’s base in Muridke. The military strikes were carried out under Operation Sindoor two weeks after the Pahalgam attack in which 26 civilians were killed. Forex traders said the Indian rupee declined on Wednesday after the Indian Army carried out ‘Operation Sindoor’ and attacked terror camps in Pakistan and Pakistan-occupied Kashmir, putting pressure on the domestic currency.
At the interbank foreign exchange, the domestic unit opened at 84.65 and oscillated between an intra-day high of 84.47 and a low of 84.93 against the dollar. The unit ended the session at 84.77, registering a decline of 42 paise from its previous close. On Tuesday, the rupee closed 5 paise lower at 84.35 against the US dollar amid rising uncertainty and cautious reassessment of risk appetite. Anuj Chowdhary, Research Analyst at Mirae Asset Sharekhan, said, “We expect the rupee to trade with a positive bias due to weaker dollar and positive domestic and global markets. FII inflows may also support the rupee. However, rising geopolitical tensions between India and Pakistan and positive crude oil prices may cap a sharp rise.” Chowdhary further added, “Traders may remain cautious ahead of the outcome of the US FOMC meeting. The US Federal Reserve is expected to keep interest rates unchanged.
The USD-INR spot price is expected to remain in the range of 84.40 to 85.10.” Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.23 per cent higher at 99.46. Dilip Parmar, Senior Research Analyst at HDFC Securities, said the Indian rupee has fallen its biggest in a month for the second day amid geopolitical concerns and a strong dollar index. Moreover, persistent dollar demand from oil importers and hedgers has put pressure on the rupee in the last two days. Spot USD-INR is expected to remain bullish, potentially reaching 85.70 if the level stays above 85. On the contrary, 84.25 presents a crucial support level,” Parmar said. Global oil benchmark Brent crude futures rose 0.42 per cent to $62.41 per barrel in mid-day trade.
The domestic stock market witnessed a lot of volatility on Wednesday after India carried out missile strikes on terror camps in Pakistan and Pakistan-occupied Kashmir and finally ended the day on a positive note. The 30-share BSE Sensex closed 105.71 points or 0.13 per cent higher at 80,746.78, while the Nifty rose 34.80 points or 0.14 per cent to close at 24,414.40. According to exchange data, foreign institutional investors (FIIs) bought shares worth Rs 2,585.86 crore on a net basis on Wednesday.
