Rupee Up 29 Paise At Over Two-Month High Against Dollar: 10 Points
- The rupee opened at Rs 71.39 at the Interbank Foreign Exchange, reported news agency Press Trust of India (PTI).
- Tuesday marks the sixth straight day on which the rupee has gained against the dollar.
- RBI's announcement to buy bonds via open market operation to ease tight cash conditions added to the upbeat mood, traders were quoted as saying in the Reuters report. RBI announced that it would inject Rs. 8,000 crore worth of liquidity into the system through open market operations on November 22.
- Gains in the rupee came amid persistent foreign fund inflows, reported PTI. Foreign portfolio investors (FPIs) purchased net equities of Rs. 1,103.36 crore on Monday, provisional data from stock exchanges showed. In the month of November so far, FPIs have invested $0.5 billion in equities and $0.8 billion in debt after withdrawing massive amounts in September and October, FX and Treasury Solutions firm IFA Global said in a note.
- Besides, the dollar's weakness against some currencies overseas also supported the rupee, the PTI report stated. The dollar index, which measures the greenback against a basket of six major currencies, was trading near an over one-week low that it hit in the previous session, reported Reuters. The currency came under pressure as US Federal Reserve officials cautioned on the global growth outlook and weak data at home, pointing to a potentially slower pace of rate hikes.
- Oil markets lost steam, giving back earlier gains, as a deteriorating economic outlook and a surge in US production outweighed expected supply cuts by the Organization of the Petroleum Exporting Countries (OPEC). Brent crude oil futures, the international benchmark for oil prices, were at $66.55 a barrel at 0313 GMT or 8:43 am IST, down 24 cents, or 0.4 per cent from their last close.
- India imports more than 80 per cent of its crude requirements, which is why a fall in oil prices is significant for the rupee.
- The benchmark 10-year bond yield fell to 7.76 per cent from Monday's close of 7.79 per cent.
- Meanwhile, the stock markets traded in the red. At 11:45 am, the S&P BSE Sensex traded at 35,627.90, down 146.98 points or 0.41 per cent, and the broader Nifty50 index of the National Stock Exchange was at 10,702.80, with a loss of 60.60 points or 0.56 per cent.
- On Monday, the RBI board advised the central bank to act to support small businesses and give banks more time to step up capital norms, following weeks of pressure from Prime Minister Narendra Modi's government to spur lending ahead of elections. The top bank agreed to set up a panel on sharing surplus reserves and restructure loans of small businesses up to Rs. 25 crore. (With agencies inputs)
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