Rupee is trading in a narrow range against the US dollar in early trade

MUMBAI MUMBAI: The rupee was trading in a narrow range in morning trade on Wednesday as a stronger US currency in the overseas market neutralised the support from positive domestic equities. The local currency opened at 83.86 at the interbank foreign exchange market but soon pared gains to close at 83.92, unchanged from its previous close. The rupee recovered from its all-time low on Tuesday and closed 17 paise higher at 83.92 against the US dollar. On Monday, the local currency had fallen 37 paise to close at an all-time low of 84.09 against the US dollar. Forex traders said risk aversion in global markets, rising geopolitical tensions in the Middle East and withdrawals by foreign investors further weighed on investor sentiment. Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP said, “The Indian rupee is expected to open at 83.91 after falling to 83.96 on Tuesday, as demand for the dollar has picked up, but the RBI is selling dollars to keep the rupee at 84 levels.”

Bhansali said that today the rupee is expected to remain in the range of 83.85 to 84.05, but it all depends on the Reserve Bank of India at what level it wants to keep the rupee in the coming days. Meanwhile, the dollar index, which gauges the strength of the dollar against a basket of six currencies, rose 0.28 per cent to 103.26. Global oil benchmark Brent crude futures rose 0.20 per cent to $76.63 per barrel in mid-trading. “Brent oil prices fell to $76.54 per barrel as volatility in stocks and concerns over slowing economic growth and weak demand put pressure on prices,” Bhansali said. In the domestic equity market, the 30-share BSE Sensex rose 642.04 points, or 0.82 per cent, to 79,235.11, while the Nifty advanced 233.75 points, or 0.97 per cent, to 24,226.30.

Foreign institutional investors (FIIs) were net sellers in the capital market on Tuesday, selling shares worth Rs 3,531.24 crore, according to exchange data. Meanwhile, the Reserve Bank’s rate-setting panel began its three-day deliberations for the next set of bi-monthly monetary policy on Tuesday amid expectations of no change in the benchmark interest rate in view of concerns over inflation and economic growth. The decision of the six-member Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das will be announced on Thursday.