Rupee Falls 6 Paise To 82.82 Per Dollar Ahead Of RBI Minutes
The rupee fell slightly against the dollar on Wednesday, even as global risks assets made a modest recovery after a deep sell-off in the previous session, tracking a shift in the Bank of Japan's (BOJ) policy.
However, the domestic currency was supported by a weak greenback against major peers and fresh foreign fund inflows, according to forex traders.
According to Bloomberg, the rupee was last at 82.8175 per dollar in early trade, compared to its previous close of 82.7550, helped somewhat by the relative calm across Asia following the BOJ-induced volatility on Tuesday.
"The rupee was range bound between 82.66 to 82.82 per dollar as volumes plummeted due to the holiday season," said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors. "Asian currencies were generally on the higher side although today they fell slightly," he added.
PTI reported that the domestic currency fell 10 paise to provisionally close at 82.80 against the US dollar.
"Though the (USD/INR) pair is lacking upward momentum, the price structure is upward with clear higher highs and higher lows being formed," Anindya Banerjee, Head Research - FX and Interest Rates at Kotak Securities, told Reuters.
"Nevertheless, if prices reverse below 82.55, then the bullish price structure will be negated."
Domestic stocks reversed course from gains earlier in the session to crash and extend losses for the second straight session.
Global markets, though, recovered after being stunned in the previous session following the BOJ unexpectedly decided on Tuesday to allow long-term rates, or its yield curve control, to fluctuate by 50 basis points on either side of its 0 per cent target.
Meanwhile, the dollar fell against a basket of other currencies, pushing gold prices to six-month highs and crude prices to rise.
Domestically, though, investors' focus will be on the Reserve Bank of India's most recent policy meeting minutes, which is due out later today, as they attempt to understand the central bank's position on the inflation trajectory and growth outlook.
In its monthly report published Tuesday, the RBI expressed confidence in the prospects for near-term economic development while acknowledging that inflation "may be slightly down, but it is certainly not out."
Separately, Tuesday saw Fitch Ratings confirm India's sovereign credit rating at "BBB-" with a stable outlook, noting that the grade benefits from the country's strong economic prospects and still-steady external finances.
However, due to greater food and fertiliser subsidies, the agency predicts a slight fiscal slippage in the current fiscal year, with the central government's budget deficit at 6.6 per cent of GDP as opposed to the Budget's 6.4 percentage point estimate.