Rupee vs Dollar: Domestic currency settles 2 paise lower at 83.05 against American dollar

Currency market update: The rupee (INR) settled at 83.05 (provisional) against the US dollar on Tuesday, February 6. Amid a firm American currency against major currencies overseas the local currency registered a slip of 2 paisa for the day from its previous close. Throughout the session, the domestic currency oscillated within a range of 83.03 - 83.06.

However, positive sentiment in the domestic equity markets and lower global crude prices supported the domestic unit, said PTI citing forex analysts.

Investors were cautious as the Reserve Bank's monetary policy committee (MPC), the six-member rate-setting panel, began the deliberation on Tuesday. The central bank will announce the key interest rate decision on Thursday.

At the interbank foreign exchange, the rupee began the day at 83.03 against the dollar and fell to as low as 83.06 during the session before settled at 83.05 against the greenback for the day.

The dollar index — which measures the value of the American currency against six peers other than the rupee — was last seen trading 0.05 per cent higher at 104.36.

Analysts attributed the higher level of the US currency to the recent macroeconomic data, which showed steady growth in the world's largest economy.
Brent crude futures, the global oil benchmark, declined 0.24 per cent to USD 77.80 per barrel said PTI.

Similarly, domestic equity benchmarks Sensex and Nifty50 declined by 0.63 per cent - 0.72 per cent. The 30-share benchmark BSE Sensex surged 454.67 points for the day to settle at 72,186.09 points while the broader NSE Nifty soared 157.70 points to settle at 21,929.40 points.

RBI Governor Shaktikanta Das-headed rate-setting panel on Tuesday started its three-day deliberations amid expectations of continued status quo on short-term lending rates as the retail inflation remains near the higher end of the central bank's comfort zone.

For almost a year, the Reserve Bank has kept the short-term lending rate or repo rate stable at 6.5 per cent. The benchmark interest rate was last raised in February 2023 to 6.5 per cent from 6.25 per cent to contain inflation driven mainly by global developments, said PTI.

On Monday, February 6, the rupee declined 5 paise to settle at 83.03 against the American dollar.

According to exchange data, foreign institutional investors (FIIs) were net buyers in the capital markets on Monday as they purchased shares worth Rs 518.88 crore.

With PTI Inputs