Currency market update: The rupee (INR) traded in a wide range on Thursday, February 8, but settled on a flat note against the US dollar. After the Reserve Bank decided to keep the key policy rate unchanged for the sixth time in a row to maintain a tight vigil on inflation, the local unit settled at 82.96 (provisional) for the day, similar to its previous close. Throughout the session, the domestic currency moved within a range of 82.89 - 83.

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A negative trend in domestic equities weighed on investor sentiments, PTI said citing forex traders.

At the interbank foreign exchange, the rupee began the day at 82.94 against the dollar and fell to as low as 83 during the session before settling at 82.96 (provisional) against the greenback for the day. During the day, the rupee touched an intraday high of 82.89 against the US dollar.

The Indian rupee remained flat as RBI maintained status quo in its monetary policy for the sixth consecutive time and left Repo Rate unchanged at 6.5 per cent, in line with street expectations, said PTI.

The central bank revised FY24 GDP projections higher at 7.3 per cent from 7 per cent and projected FY25 GDP at 7 per cent. It also projected CPI (consumer price-based inflation) in FY25 lower at 4.5 per cent. However, the rupee lost earlier gains as domestic markets declined and US dollar also recovered, PTI added.

"We expect rupee to trade with a slight negative bias on expectations that US dollar may recover amid hawkish US Fed speak and geopolitical tensions," said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.

Israeli Prime Minister rejected a peace proposal by Hamas which may also lead to rise in crude oil prices.

However, positive global markets may support rupee at lower levels. Traders may take cues from weekly unemployment claims data from US and speeches by various Fed officials. USD-INR spot price is expected to trade in a range of Rs 82.70 to Rs 83.30.

Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das on Thursday said the Monetary Policy Committee (MPC) will remain watchful of food inflation so that the benefits gained are not frittered away.

The RBI on Thursday projected a Gross Domestic Product (GDP) growth of 7 per cent for 2024-25, which is lower than the 7.3 per cent expansion estimated for the current fiscal.

Das said rural demand continues to gather pace, urban consumption remains strong and investment cycle is gaining steam on the back of increased capex. He said there are signs of revival in private investments.

The dollar index — which measures the value of the American currency against six peers other than the rupee — was last seen trading 0.03 per cent higher at 104.08.

Global oil benchmark Brent crude futures inched up 0.16 per cent to USD 79.34 per barrel at the last count.

Contrast to this, domestic equity benchmarks Nifty50 and Sensex lowered by 0.97 - 1 per cent. The 30-share benchmark BSE Sensex closed 723.57 points for the day to settle at 71,428.43 points while the broader NSE Nifty  declined 212.55 points to settle at 21,717.95 points.

On Wednesday, February 7, the rupee appreciated 9 paise to close at 82.96 against the dollar.

According to exchange data, foreign institutional investors (FIIs) were net sellers in the equity market on Wednesday as they offloaded shares worth Rs 1,691.02 crore.

With inputs from PTI