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FIIs offloaded ₹278.70 crore in the capital markets on a net basis on Monday (December 16, 2024). File
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The rupee dropped 1 paisa to hit a new lifetime low of 84.92 against the U.S. dollar in early trade on Tuesday (December 17, 2024), weighed down by foreign fund outflows and a muted trend in domestic equities.

Forex traders said the rupee is likely to remain under pressure due to dollar demand from importers and foreign banks.

At the interbank foreign exchange, the rupee opened at 84.89 against the greenback, then fell further to 84.92 against the American currency, registering a fall of 1 paisa over its previous close.

On Monday (December 16, 2024), the rupee depreciated by 11 paise to close at an all-time low level of 84.91 against the U.S. dollar.

“The Indian rupee is expected to open at its lowest after a record number in respect of imports and a record trade deficit for November 24 mainly on account of increase in gold buying, took rupee lower in the NDF (Non-Deliverable Forward) markets,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

“The opening will depend on where RBI supports rupee, but the trend indicated weakness. The range for the day is 84.75/00 with a close watch on RBI,” Mr. Bhansali added.

On the domestic macroeconomic front, India’s exports in November contracted by 4.85% year-on-year to $32.11 billion, while the trade deficit widened to an all-time high of $37.84 billion due to a record surge in gold imports.

The country’s gold imports in November reached a record high of $14.86 billion, registering a four-fold increase, mainly on account of festival and wedding demands, according to commerce ministry data.

Gold imports stood at $3.44 billion in November 2023.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.02% at 106.83.

Brent crude, the global oil benchmark, fell 0.12% to $73.82 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 326.76 points or 0.40% down at 81,421.81 points in morning trade, while Nifty was down 107.50 points or 0.44% to 24,560.75 points.

Foreign Institutional Investors (FIIs) offloaded ₹278.70 crore in the capital markets on a net basis on Monday (December 16, 2024), according to exchange data.

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The rupee slumped to its all-time low of 84.76 (provisional) against the U.S. dollar after dropping 8 paise on Wednesday (December 4, 2024) amid a strengthening greenback and increase in crude prices.

Forex traders said a positive trend in domestic equity markets and foreign fund inflows supported the local unit at lower level.

At the interbank currency exchange, the rupee opened at 84.66 and traded in the range of 84.65-84.76. Eventually it settled at 84.76 (provisional), 8 paise lower than Tuesday’s close of 84.68.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said, the rupee lost initial gains amid strong dollar and a positive tone in crude oil prices.

“Dollar strengthened amid upbeat JOLTS job openings data from the US and disappointing Caixin Services PMI data from China, he said, adding, “USD-INR spot price is expected to trade in the range of ₹84.50 to ₹85.”

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.11% at 106.47.

Brent crude, the global oil benchmark, surged 0.83 per% to $74.23 per barrel in futures trade.

On the domestic equity markets, Sensex climbed 110.58 points to settle at 80,956.33, while Nifty was marginally up 10.30 points to 24,467.45.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday (December 3, 2024), purchasing shares worth ₹3,664.67 crore, according to exchange data.

The rupee recovered from its lowest level of 84.46 to settle 4 paise higher at 84.42 against the U.S. dollar
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The rupee traded in an almost flat note and settled 1 paisa lower at 84.43 (provisional) against the U.S. dollar on Tuesday (November 19, 2024), as support from positive domestic equity markets and lower crude oil prices was negated by the strength of the American currency in the overseas market.

Forex traders said the Ukraine-Russia war took a new turn with Russia updating its nuclear doctrine and Ukraine aimed American missiles at Russia. Safe haven assets like Gold, JPY, CHF and to some extent dollar were bought and the rupee felt the heat and was sold at the closing hours.

At the interbank foreign exchange, the rupee opened at 84.39 and stayed range-bound throughout the session. It finally settled at 84.43 (provisional) against the greenback, down 1 paisa from its previous close.

On Monday (November 18, 2024), the rupee recovered from its lowest level of 84.46 to settle 4 paise higher at 84.42 against the U.S. dollar.

Praveen Singh, Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, said the USD-INR pair is likely to trade in this range in the near term until the U.S. yields break higher decisively. The 10-year U.S. yields face a crucial resistance at 4.50%.

“Traders will closely monitor the assembly elections in Maharashtra and Jharkhand. In addition, India’s PMIs data slated to be released on Friday (November 15, 2024) will also be on traders’ radar,” he added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.15% at 106.35.

Brent crude, the global oil benchmark, declined by 0.42% to $72.99 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex rose 239.37 points, or 0.31%, to close at 77,578.38 points, while Nifty climbed 64.70 points, or 0.28%, to settle at 23,518.50 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday (November 18, 2024), as they offloaded shares worth ₹1,403.40 crore, according to exchange data.

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| Photo Credit: Reuters

The rupee stayed flat at 84.07 against the U.S. dollar in early trade on Tuesday (October 22, 2024) as positive sentiment in domestic equity markets was negated by the unabated outflow of foreign funds.

The local unit resisted the fall on the back of the retreating dollar and a downward movement in the crude oil prices, forex traders said.

At the interbank foreign exchange, the rupee opened at 84.07 against the greenback and traded on a flat note in early deals.

On Monday (October 21, 2024), the rupee settled flat at 84.07 against the U.S. dollar, a tad higher from its all-time low of 84.10 recorded on October 11.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.04% to 103.79.

Brent crude, the international benchmark, declined 0.22% to $74.13 per barrel in futures trade.

On the domestic equity market front, Sensex rose 180.46 points, or 0.22%, to 81,331.73 points. The Nifty also advanced 61.25 points, or 0.25%, to 24,842.35 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Monday (October 21, 2024), as they offloaded shares worth ₹2,261.83 crore, according to exchange data.

Analysts attributed the unabated outflow of FIIs to a further rate cut by the Chinese central bank and a muted sentiment towards domestic corporate earnings.

The rupee witnessed a range-bound trade and strengthened marginally by 4 paise to 84 (provisional) against the U.S. dollar on Wednesday (October 16, 2024) as easing crude oil prices supported investor sentiments.
| Photo Credit: Reuters

The rupee witnessed a range-bound trade and strengthened marginally by 4 paise to 84 (provisional) against the U.S. dollar on Wednesday (October 16, 2024) as easing crude oil prices supported investor sentiments.

Forex traders said the rupee traded in a narrow range as a strong dollar and a muted tone in the domestic equities weighed on the local unit, while weak crude oil prices and any likely intervention by the Reserve Bank of India (RBI) supported the local currency at lower levels.

At the interbank foreign exchange market, the local unit opened at 84.03 and traded in a narrow range of 83.98 and 84.07 and finally settled for the day at 84.00 (provisional), higher by 4 paisa over its previous close of 84.04 against the dollar.

“The local currency pair was weighed down by significant foreign fund outflows this month amid strength of the American currency in the overseas market which surged to a two-month high of 103.25.

“Overall Foreign Institutional Investors offloading $8 billion in October also weighed on sentiments for rupee in the current month,” said Maneesh Sharma, AVP – Commodities & Currencies, Anand Rathi Shares and Stock Brokers.

Analysts said investors are awaiting the U.S. retail sales and jobless claims reports, due on Thursday (October 17, 2024), for cues on the future path of U.S. policy rates which could provide crucial direction to dollar, while likely intervention by the Reserve Bank of India (RBI) could also support the local currency pair at lower levels.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was marginally down by 0.01% to 103.25 points.

Brent crude, the international benchmark, eased 0.31% to $74.02 per barrel in futures trade amid easing concerns about supply disruptions due to the Middle East conflict.

In the domestic equity market, the 30-share BSE Sensex declined 318.76 points, or 0.39%, to close at 81,501.36 points, while the Nifty was down 86.05 points, or 0.34%, to 24,971.30 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday (October 15, 2024), as they offloaded shares worth ₹1,748.71 crore, according to exchange data.

Yunis Safi, a businessman in Kabul, knows very well the importance of showing off your phone if you want something done.

Also read: Afghanistan since Taliban takeover

“In Afghanistan, your phone is your personality,” he said, smiling, a jewel-encrusted ring on each hand. One boasts an emerald, the other a fat Russian diamond. “When you go to a meeting with the government, the better your phone, the more they respect you.” Mr. Safi runs a phone shop in the posh Shar-e-Naw neighborhood. An armed guard stands outside. The iPhone 15 Pro Max adorns the shop shelves, retailing for $1,400. He has customers ready to part with this sum of money, which may come as a surprise to some given the country’s economic woes and more than half the population relying on humanitarian aid to survive.

Also read: Timeline | The Taliban’s rapid advance across Afghanistan

Afghanistan’s finances were on shaky ground even before the Taliban seized power in 2021. The budget relied heavily on foreign aid and corruption was rife. The takeover sent Afghanistan’s economy into a tailspin, billions in international funds were frozen, and tens of thousands of highly skilled Afghans fled the country and took their money with them.

But, even amid difficult conditions, some businesses are making money out of Taliban rule. Women are reduced to customers, however, as authorities have barred them from most jobs, including retail. None of Mr. Safi’s 78 staff are women.

He has tapped into a diverse consumer base — the ones hungry for the latest iPhone release and those happier with simple handsets, which make up the bulk of his sales and sell for between $20 and $200.

The Taliban used to attack phone towers and threaten telecom companies, accusing them of colluding with United States and other international forces in helping track insurgents’ movements through mobile phone signals. Now, they’re investing in the 4G mobile networks.

The Communications Ministry says 2 million new SIM cards have been issued in the past two years and that subscriber numbers are increasing. Ministry spokesperson Enayatullah Alokozai said the government was plowing $100 million into the telecom sector and had fully restored hundreds of towers.

There are 22.7 million active SIM cards in a country of 41 million people. Of these, 10 million are for voice calls and the rest are for mobile internet.

According to Trade Ministry figures, phone imports have risen. More than 1,584 tons of phones came into Afghanistan in 2022. Last year, it was 1,895 tons.

Mr. Safi said he has many Taliban customers and it’s the younger ones who prefer iPhones. “Of course they need smartphones. They use social media, they like making videos. The iPhone has better security than Samsung. The camera resolution, processor, memory are all better. Afghans use their smartphones like anyone else.” Mr. Safi has the iPhone 15 Pro Max, wears an Apple Watch Ultra and owns three cars.

Business was bad immediately after the Taliban takeover but it’s improving, Mr. Safi said. “The people buying the new release iPhones are the ones with relatives abroad sending money to Afghanistan.” Remittances are a lifeline, although they’re less than half of what they were before the Taliban took power and the banking sector collapsed.

At the raucous Shahzada Market in Kabul, hundreds of money exchangers clutch stacks of the local currency, the Afghani, and noisily hawk their wares. They occupy every floor, stairwell, nook and cranny.

Abdul Rahman Zirak, a senior official at the money exchange market, estimates that $10 million changes hands daily. The diaspora sends mostly U.S. dollars to families, who exchange it for the Afghani.

There used to be more ways to send money to Afghanistan before the Taliban seized control. But there are no more links to  Society for Worldwide Interbank Financial Telecommunications (SWIFT) or international banking and that’s a major reason why business is brisk at the market, he said.

“The work of money exchangers has increased and strengthened,” Mr. Zirak said. “Money transfers come from Canada, the U.S., Europe, Australia, Arab nations and other neighboring countries.” Trade becomes hectic during the holidays. During the holy month of Ramadan, 20,000 people visited the market daily and it took more than 90 minutes to enter, he said.

“If the sanctions are removed and the assets are unfrozen, then maybe our business will decrease. But I don’t see that happening. Many don’t have bank accounts. Unemployment is high, so people send money to Afghanistan. Our business will be needed for years to come.” Irfanullah Arif, who runs Haqqani Books, a specialist retailer of Islamic texts, is also upbeat about his fortunes. The majority of his customers are teachers and students at religious schools, or madrassas.

There are at least 20,000 madrassas in Afghanistan. The Taliban want to build more. Last year, the supreme leader reportedly ordered the recruitment of 1,00,000 madrassa teachers.

While Mr. Arif’s business suffered like everyone else’s in the chaotic aftermath of the takeover, there was another reason. “All the students left the madrassas and went to work for the [Taliban] government,” said Mr. Arif.

The Taliban’s push for religious education has given him some relief. Last year, he sold 25,000 textbooks.

But there’s a price to pay for success. Mr. Arif imports everything and the Taliban are laser-focused on collecting revenue, even on Islamic literature.

Mr. Arif pays a tax of 170 Afghanis ($2.36) on a carton of 100 books, the shipping cost for which is 500 Afghanis ($6.95). Taxes on his bookstore have tripled under Taliban rule.

“That’s why books are expensive in Afghanistan,” he sighed. “With the increase of madrassas, our trade has gone up, but so have the taxes.”

The rupee stayed on downward track for the third consecutive session and depreciated by 6 paise to 83.23 against the U.S. dollar
| Photo Credit: SUDERSHAN V

The rupee stayed on downward track for the third consecutive session and depreciated by 6 paise to 83.23 against the U.S. dollar in early trade on Thursday, tracking a firm American currency and negative equity market sentiment.

Forex traders said the Indian currency was also pressured due to massive selling of equities by foreign investors even as the crude oil prices hovered close to $90 a barrel amid geopolitical tensions in the Middle East.

At the interbank foreign exchange market, the local unit opened weak at 83.19 and then touched the lowest level of 83.23 against the greenback, registering a loss of 6 paise from its previous close.

This is the third day of fall in the rupee. It dropped 4 paise on Monday, followed by a dip of 1 paisa on Wednesday. Forex markets were closed on Tuesday on account of Dussehra. On Wednesday, the rupee closed at 83.17 against the U.S. dollar.

Analysts attributed the strengthening dollar to a record rise in the U.S. Treasury yields after positive data on home sales in the U.S. on Wednesday.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.20 per cent higher at 106.75 on Thursday.

Global oil price benchmark Brent crude declined 0.31 per cent to $89.85 per barrel.

On the domestic equity market front, the Sensex plunged 478.55 points or 0.75 per cent to 63,570.51 while broader Nifty tanked 152.15 points or 0.80 per cent to 18,970.

Foreign Institutional Investors sold equities worth ₹4,236.60 crore on Wednesday, according to exchange data.

The rupee appreciated by 5 paise to 83.11 against the U.S. dollar in early trade. File
| Photo Credit: V. SUDERSHAN

The rupee appreciated by 5 paise to 83.11 against the U.S. dollar in early trade on Wednesday, tracking a weak America currency and softening crude oil prices in the overseas market.

Some buying by foreign equity investors supported the Indian currency even though it was pressured by a subdued sentiment in the domestic equity markets, forex traders said.

At the interbank foreign exchange market, the local unit opened stronger by 8 paise at 83.08 and then touched the lowest level of 83.11 against the greenback, registering a gain of 5 paise from its previous close.

On Monday, the rupee closed 4 paise lower at 83.16 against the U.S. dollar. Forex markets were closed on Tuesday on account of Dussehra.

Gaurang Somaiya, Forex and bullion analyst, Motilal Oswal Financial Services, said that the dollar fell against its major crosses after U.S. yields retracted from its record level.

He said the USD-INR (Spot) is expected to “trade sideways with a negative bias and quote in the range of 82.80 and 83.20”.

“Market participants will now be keeping an eye on the US GDP data that is due tomorrow and could trigger more wild swings in bond yields and currency markets. Euro and pound fell in yesterday’s session after preliminary manufacturing data came in below estimates,” Mr. Somaiya added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.09 per cent lower at 106.18.

Global oil price benchmark Brent crude inched up 0.05 per cent to $88.11 per barrel.

On the domestic equity market front, Sensex fell 48.16 points or 0.06 per cent to 64,530.02 points while broader Nifty was down 11.20 points or 0.06 per cent at 19,270.55 points.

Foreign Institutional Investors bought equities worth market ₹252.25 crore on Monday, according to exchange data.

The rupee paused its two days of gains and settled 6 paise lower at 83.24 against the U.S. dollar
| Photo Credit: SUDERSHAN V

The rupee paused its two days of gains and settled 6 paise lower at 83.24 (provisional) against the U.S. dollar on Thursday as rising crude oil prices dented the investor sentiment.

Forex analysts said early gains in the domestic currency on the back of the weak dollar were reversed by the subdued domestic equity markets and concerns over foreign funds withdrawal.

At the interbank foreign exchange, the rupee opened at 83.17 and then traded between the intra-day peak of 83.12 and the lowest level of 83.25 against the greenback. The local unit finally settled at 83.24 (provisional), registering a loss of 6 paise from its previous close.

The rupee had settled 7 paise higher on Wednesday, a day after gaining 3 paise against the American currency.

Market participants were also awaiting the industrial production data for August and inflation numbers for September to be released later in the day, which will provide insights into the country’s economic health.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the rupee is expected to trade with a slight positive bias on expectations of a decline in India’s inflation and a rise in risk appetite in global markets.

“Traders may remain cautious ahead of India’s CPI and IIP data. Traders may also take cues from U.S. CPI, weekly unemployment claims and Federal Budget balance data. USD-INR spot price is expected to trade in a range of ₹82.70 to ₹83.60,” Mr. Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.09 per cent lower at 105.72.

Brent crude futures, the global oil benchmark, witnessed a sharp rise of 1.20 per cent to $86.85 per barrel.

On the domestic equity market front, the BSE Sensex closed 64.66 points or 0.10 per cent lower at 66,408.39. The broader NSE Nifty declined 17.35 points or 0.09 per cent to 19,794.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Wednesday as they offloaded shares worth ₹421.77 crore, as per exchange data.