Rupee drops 11 paise vs the US dollar to close at 83.32
Tuesday saw an 11-paise decline in the value of the rupee relative to the US dollar, with the rupee falling to 83.32 (provisional) on the back of weak local equity markets and importers’ dollar demand.
Forex dealers said that importers’ dollar demand and withdrawals of foreign funds affected the market mood.
The local unit depreciated 11 paise from its previous close to finish at 83.32 (provisional) versus the dollar at the interbank foreign exchange market, where it had started at 83.28.
In the first trading day of 2024 on Monday, the rupee fell 5 paise to 83.21 versus the US dollar.
The dollar index, which measures the strength of the US dollar relative to a basket of six other currencies, increased by 0.11 percent to 101.44 on Tuesday.
The benchmark for global oil, Brent crude futures, were up 2.13 percent at USD 78.68 a barrel.
Regarding the local equities market, the Sensex saw a decrease of 379.46 points, or 0.53%, ultimately landing at 71,892.48 points. To reach 21,665.80 points, the Nifty dropped 76.10 points, or 0.35 percent.
According to exchange statistics, Foreign Institutional Investors (FIIs) sold shares worth Rs 855.80 crore on Monday, making them net sellers in the capital markets.
Due to poor local markets and a strengthening US dollar, the Indian rupee fell by 0.14 percent. Crude oil price increases have had an impact on the currency. Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, claims that the US dollar increased due to its attractiveness as a safe haven amid geopolitical concerns in the Red Sea and the continuing war in the Middle East.
We anticipate that poor local stocks and an increase in the US dollar will cause the rupee to trade with a negative bias. Increases in the price of crude oil might have an impact on the national currency. Any FII outflows, meanwhile, would help the rupee at lower levels, according to Choudhary.
Choudhary said that US construction expenditure data and the final manufacturing PMI might serve as signals for traders. “Traders may be anticipating tomorrow’s JOLTS employment report from the US, the manufacturing index data from India, and the ISM manufacturing PMI. The current price of the USD-INR is anticipated to move between 83.10 and 83.70,” he said.
Regarding the macroeconomic front at home, GST receipts increased by 10% to around Rs 1.64 lakh crore in December of last year from Rs 1.49 lakh crore in the same month previous year.
Gross Goods and Services Tax (GST) collection from April to December 2023 increased by a strong 13%, to Rs 14.97 lakh crore from the preceding Rs 13.40 lakh crore.
