Image for representative purposes only
| Photo Credit: The Hindu

The rupee settled for the day on a flat note higher by just 1 paisa at 84.85 (provisional) against the U.S. dollar on Tuesday (December 10, 2024), a tad above its all-time low level, as change of guard at the Reserve Bank of India raised expectations of a shift in the central bank’s monetary policy.

The government on Monday (December 9, 2024) appointed Revenue Secretary Sanjay Malhotra as the 26th Governor of the Reserve Bank of India.

Forex traders said markets now expect a rate cut in the upcoming monetary policy in February. Meanwhile, a weak tone in the domestic markets and a surge in the U.S. dollar index further pressurised the rupee.

At the interbank foreign exchange, the rupee opened at 84.80 and touched the lowest level of 84.86 against the greenback during intra-day trade. The unit ended the session at 84.85 (provisional) against the dollar, higher by just 1 paisa from its previous close.

On Monday (December 9, 2024), the rupee saw its steepest fall in over a month and plunged 20 paise to settle at the lowest-ever level of 84.86 against the U.S. dollar.

“We expect the rupee to trade with a negative bias on strength in the U.S. dollar and overnight gains in crude oil prices. However, recent FII inflows may support the rupee at lower levels,” said Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan.

Mr. Choudhary further said that any intervention by the RBI may also support the rupee.

“Investors may remain cautious ahead of U.S. inflation data on Wednesday (December 11, 2024). Inflation is expected to be higher than the previous month. USD-INR spot price is expected to trade in a range of 84.65 to 85.10,” he said.

Shaktikanta Das, who will demit office as the Governor of the Reserve Bank of India on Tuesday (December 10, 2024), was the key man behind the planning and execution of the demonetisation drive and roll-out of the landmark goods and services tax (GST). At the RBI, he steered India’s monetary policy response during the challenging period of the pandemic.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.13% at 106.28.

Brent crude, the global oil benchmark, fell 0.36% to $71.88 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex closed on a flat note at 81,510.05, higher by just 1.59 points. The Nifty fell 8.95 points, or 0.04%, to 24,610.05 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday (December 9, 2024), as they purchased shares worth ₹724.27 crore, according to exchange data.

Image used for representational purpose only.
| Photo Credit: Reuters

The rupee appreciated by 38 paise to 82.75 against the U.S. dollar in early trade on September 22, as the inclusion of India in the JPMorgan bond index boosted investor sentiment.

Forex traders said the decision of JPMorgan Chase & Co to include Indian government bonds in its benchmark emerging-market index, is expected to have far-reaching implications for India’s debt market and global investors.

At the interbank foreign exchange, the domestic unit opened strong at 82.75, registering a gain of 38 paise from its previous close.

On Thursday, the rupee consolidated in a narrow range to settle 2 paise lower at 83.13 against the dollar.

India’s inclusion in a major global bond index will open doors to increased foreign investment in the nation’s debt market, traders said.

“The inclusion of India in the JPMorgan bond index has had a favourable effect on the rupee, with the currency showing strength by appreciating around 0.42% in the NDF markets and reaching levels around 82.80,” CR Forex Advisors MD-Amit Pabari said.

This positive momentum is anticipated to carry over to the onshore market, with a potential to move towards 82.50 in the next few sessions once 82.80 levels are taken out. The upside is likely to remain capped between 83.25-83.30 zone amid strong RBI intervention, Mr. Pabari added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.12% to 105.48.

Brent crude futures, the global oil benchmark, was trading 0.61% higher at $93.87 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 22.14 points or 0.03% higher at 66,252.38 points. The broader NSE Nifty declined 3.65 points or 0.02% to 19,738.70.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Thursday as they offloaded shares worth ₹3,007.36 crore, according to exchange data.