New Delhi, Dec 2: Rupee opened on a flat note and rose just 2 paise from its all-time low level to 84.58 against the US dollar in morning trade on Monday, on disappointing macroeconomic data and a negative trend in domestic equities.
Forex traders said Asian currencies like CNH, KRW and IDR were down after Trump Rhetoric on BRICs currency. Besides, the broad strength of the American currency and unabated foreign portfolio outflows further dented investor sentiments.
President-elect Donald Trump on Saturday threatened a 100 per cent tariff on the BRIC bloc of nations if they act to undermine the US dollar.
At the interbank foreign exchange, the rupee opened at 84.59 and moved in a tight range and touched 84.58 against the greenback, registering a gain of just 2 paise over its previous close. In initial trade it also revisited its all-time low of 84.60 against US dollar.
On Friday, the rupee plunged 13 paise to settle at a fresh all-time low of 84.60 against US dollar.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.52 per cent at 106.28.
Brent crude, the global oil benchmark, surged by 0.57 per cent to USD 72.25 per barrel in futures trade.
“With Trump indicating a 100 per cent tariffs on a separate BRICS currency along with a slowing GDP growth India’s rupee showed a weakening opening this morning. Markets look to the Reserve Bank of India (RBI) as to at which level it will continue to support the currency,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
India’s forex reserves dropped USD 1.31 billion to USD 656.582 billion for the week ended November 22, the Reserve Bank of India (RBI) said on Friday.
The reserves had dropped a record USD 17.761 billion to USD 657.892 billion in the previous reporting week ending November 15.
On the domestic macroeconomic front, the latest government data released on Friday showed India’s economic growth slowed to near two-year low of 5.4 per cent in the July-September quarter of this fiscal due to poor performance of manufacturing and mining sectors as well as weak consumption.
A weak opening on domestic bourses also weighed on the local unit. The 30-share benchmark index Sensex was trading 343.00 points, or 0.43 per cent lower, to 79,459.79 points. The Nifty fell 106.65 points, or 0.44 per cent, to 24,024.45 points.
Meanwhile, the central government’s fiscal deficit at the end of the first seven months of the current financial year touched 46.5 per cent of the full-year target. The deficit stood at 45 per cent of the budget estimates in the corresponding period of 2023-24.
Traders said the persistent selling pressure by foreign funds added further strain on the currency. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth Rs 4,383.55 crore, according to exchange data. (PTI)
