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India’s forex reserves dropped by $3.709 billion to $701.176 billion for the week ended October 4, the RBI said on Friday (October 11, 2024).

In the previous reporting week, the reserves had jumped by $12.588 billion to an all-time high of $704.885 billion.

For the week ended October 4, foreign currency assets, a major component of the reserves, decreased by $3.511 billion to $612.643 billion, the data released on Friday showed.

Expressed in terms of dollar, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

Gold reserves decreased by $40 million to $65.756 billion during the week, the RBI said.

The Special Drawing Rights (SDRs) were down by $123 million to $18.425 billion, the apex bank said.

India’s reserve position with the IMF was down by $35 million to $4.352 billion in the reporting week, the apex bank data showed.

At the interbank foreign exchange market, the local unit opened at 83.92, then gained ground to touch 83.88, registering a rise of 9 paise from its previous close. File
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The rupee appreciated 9 paise to 83.88 against the U.S. dollar in morning trade on Thursday (August 29, 2024), supported by the weakness of the American currency in the overseas market and a positive trend in domestic equities.

Forex traders said the market is awaiting cues from the U.S. Gross Domestic Product (GDP) and the U.S. Personal Consumption Expenditure (PCE) inflation data, as this data point is crucial as it could sway the Federal Reserve’s decision on whether to implement a 25 or 50 basis point rate cut at its September meeting.

At the interbank foreign exchange market, the local unit opened at 83.92, then gained ground to touch 83.88, registering a rise of 9 paise from its previous close.

On Wednesday (August 28, 2024), the rupee depreciated 4 paise to close at 83.97 against the American currency.

“The rupee is in the midst of a tug-of-war between positive and negative factors. With the Reserve Bank firmly in control, the rupee is expected to trade within a narrow range in the near term, with the upside likely capped around 83.80 and strong support near 84.05,” CR Forex Advisors MD Amit Pabari said.

“Most Asian currencies were range-bound as the market awaited the U.S. GDP and PCE data, with IDR at 15412, KRW at 1335 and CNH at 7.1278,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.16% to 100.92 points.

Brent crude, the international benchmark, gained 0.06% to $78.70 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex advanced 211.91 points, or 0.26%, to 81,997.47 points, while the Nifty was up 52.85 points, or 0.21%, to 25,105.20 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday (August 28, 2024), as they offloaded shares worth ₹1,347.53 crore, according to exchange data.

The rupee strengthens against the dollar, supported by a positive equities trend
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The Rupee appreciated 8 paise to 83.89 against the U.S. dollar in early trade on Friday (August 9, 2024), supported by a positive trend in domestic equities and a decline in the U.S. dollar index.

Forex traders said that after the Reserve Bank of India’s monetary policy announcement, markets now await U.S. CPI data, India CPI, WPI and IIP data and India’s trade data, all scheduled to be released next week.

“The Jackson Holes Symposium to be held after next week will also remain in focus,” traders said.

At the interbank foreign exchange, the rupee opened at 83.95 against the greenback, then touched 83.89, registering a rise of 8 paise over its previous closing price.

On Thursday (August 8, 2024), the rupee consolidated in a narrow range and settled for the day lower by 2 paise at 83.97 against the U.S. dollar.

“The rupee was protected by the Reserve Bank of India (RBI) at 83.96 for this week and the local unit is likely to trade in a narrow range of 83.90/84.00 for the day after the RBI kept key benchmark rates on hold,” said Anil Kumar Bhansali, Head of Treasury and Executive Director of Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.03% lower at 103.17.

Brent crude, the global oil benchmark, advanced 0.15% to $79.28 per barrel. “Brent oil prices rose to $79.22, a 3% weekly gain, on rising Middle East tensions and better than expected U.S. jobless claims data, giving a better outlook on the U.S. economy,” Mr. Bhansali added.

Market analysts said while the rupee seems to be tilting towards a negative bias, sharp fluctuations are not anticipated.

Meanwhile, the Monetary Policy Committee (MPC) of the Reserve Bank kept the benchmark repurchase or repo rate unchanged at 6.50%. Announcing the bi-monthly monetary policy review RBI Governor Shaktikanta Das said, “The Indian rupee has remained largely range-bound so far this financial year.”

Mr. Das further noted that the country’s forex reserves touched a record high of $675 billion as of August 2.

On the domestic equity market front, Sensex surged 958.63 points, or 1.22%, to 79,844.85 points. The Nifty advanced 280.70 points, or 1.16%, to 24,397.70 points.

“Foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday (August 8, 2024), as they offloaded shares worth ₹2,626.73 crore,” according to exchange data.

On August 1, the Rupee declined five paise to settle at 83.73 against the U.S. dollar.
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The Rupee turned flat at 83.73 against the U.S. currency on August 2 amid weak equity markets and an upward movement in crude oil prices overseas.

According to forex traders, “the Indian currency found support due to softening the dollar against major rivals following the U.S. Federal Reserve’s decision to maintain the status quo on interest rates and some inflows of foreign capital into Indian equities.”

At the interbank currency exchange, the domestic currency opened at 83.74 and inched up to trade at 83.73 against the dollar, the previous day’s closing level. On August 1, the Rupee declined five paise to settle at 83.73 against the U.S. dollar.

Anand James, Chief Market Strategist of Geojit Financial Services, said the Rupee’s weakness was capped by “a likely intervention from the Reserve Bank of India”.

“The next key U.S. economic release is the July jobs report, expected on August 2,” he added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.07% to 104.13. Brent crude — the global oil benchmark — rose by 0.79% to $80.15 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex plunged 614.96 points or 0.75% to 81,252.59 in morning trade, while the broader Nifty declined 194.80 points or 0.78% to 24,816.10.

“Foreign institutional investors were net buyers in the capital markets on August 1 and bought shares worth ₹2,089.28 crore, “ according to exchange data.

A monthly survey released on August 1 showed India’s manufacturing sector growth eased slightly to 58.1 in July from 58.3 in June on softer increases in new orders and output, while cost pressures and demand strength led to the steepest increase in selling prices since October 2013.

“The government’s GST collections in July rose 10.3% to more than ₹1.82 lakh crore, driven by domestic transactions in goods and services,” according to official data released on August 1.

On July 24, the Rupee depreciated two paise to hit its all-time closing low of 83.71 against the U.S. dollar. File
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The Rupee fell one paisa to close at an all-time low of 83.72 (provisional) against the U.S. dollar on July 25, dragged down by demand for the American currency in the overseas market and significant foreign fund outflows.

Forex traders said the fall in domestic unit came on the heels of a significant downturn in the Indian equity markets, sparked by the government’s decision to hike the tax rate on capital gains.

At the interbank foreign exchange market, the local unit opened at 83.72 and touched an intra-day high of 83.66 and a low of 83.72 against the dollar during the session.

It finally settled at an all-time low level of 83.72 (provisional) against the American currency, down one paisa from its previous close. On July 24, the Rupee depreciated two paise to hit its all-time closing low of 83.71 against the U.S. dollar.

“The local unit appreciated slightly during the intra-day trade on supposed intervention by the Reserve Bank of India (RBI) and overall weakness in crude oil prices,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.

“We expect the Rupee to trade with a slight negative bias on weak global markets and fresh FII outflows. However, weak U.S. dollar and declining crude oil prices may support the Rupee at lower levels. intervention by the Reserve Bank may also support the Rupee,” Mr. Choudhary added.

The government’s decision to hike the tax rate on capital gains dampened market sentiment, exerting immense pressure on the Rupee and the equity market.

In the domestic equity market, the 30-share BSE Sensex fell 109.08 points or 0.14% to settle at 80,039.80 points and Nifty dropped 7.40 points or 0.03% to 24,406.10 points.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 104.17, lower by 0.21%. Brent crude futures, the global oil benchmark, fell 1.79% to $81.25 per barrel.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth ₹5,130.90 crore, according to exchange data.

On July 24, the Rupee depreciated two paise to hit its all-time closing low of 83.71 against the U.S. dollar.
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Rupee opened on a muted note and fell to an all-time low of 83.72 against the U.S. dollar on July 25, dragged down by the strength of the American currency in the overseas market and significant foreign fund outflows.

Forex traders said the fall in the domestic unit came on the heels of a significant downturn in the Indian equity markets, sparked by the government’s decision to hike the tax rate on capital gains.

At the interbank foreign exchange market, the local unit was trading in a narrow range. It opened at an all-time low of 83.72 against the American currency, registering a fall of one paisa from its previous close.

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On July 24, the Rupee depreciated two paise to hit its all-time closing low of 83.71 against the U.S. dollar. The government’s decision to hike the tax rate on capital gains dampened market sentiment, exerting immense pressure on the Rupee and the equity market.

“Post-Budget day, the benchmark Indian equity indices, BSE Sensex and Nifty 50, dipped by approximately 0.3% and 0.2%, respectively, as foreign institutional investors withdrew a staggering $350 million from Indian stocks.

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“Adding to the turmoil, persistent high demand for dollars, driven by defence and oil payments, compounded the currency’s woes,” CR Forex Advisors MD Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 104.21, lower by 0.17%. Brent crude futures, the global oil benchmark, fell 0.75% to $81.10 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 425.14 points or 0.53% lower at 79,723.74 points. The broader NSE Nifty was down 120.65 points or 0.49% to 24,292.85 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on July 24 as they offloaded shares worth ₹5,130.90 crore, according to exchange data.

On July 12, the Rupee settled at 83.51 against the U.S. dollar.
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Rupee depreciated 11 paise and settled for the day at an all-time low of 83.62 (provisional) against the U.S. dollar on July 15, weighed down by the overall strength of the American currency in the overseas market.

Forex traders said a positive trend in domestic equities, wherein benchmark indices touched all-time high levels and significant foreign fund inflows supported the Rupee at lower levels.

At the interbank foreign exchange market, the local unit opened at 83.53, but lost ground and finally settled at an all-time low of 83.62 (provisional) against the dollar, 11 paise lower than its previous close. On July 12, the Rupee settled at 83.51 against the U.S. dollar.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the Rupee declined on positive U.S. dollar and rising domestic inflation.

“U.S. dollar rose on safe haven demand amid political violence in the U.S.,” he said, adding that rising odds of a rate cut by Fed in September may limit a sharp upside in the greenback.

“Traders may take cues from Empire State manufacturing index data from the U.S.. USD-INR spot price is expected to trade in a range of ₹83.30 to ₹83.80,” Mr. Choudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally lower by 0.02% at 104.07. Brent crude futures, the global oil benchmark, were trading 0.09% higher at $85.11 per barrel.

In the domestic equity market, the benchmark indices scaled all-time high levels. The 30-share BSE Sensex ended the day 145.52 points, or 0.18%, higher at an all-time high of 80,664.86 points. The broader NSE Nifty settled 84.55 points, or 0.35%, higher at a record 24,586.70 points.

According to the official data released on July 15, wholesale inflation in the country rose for the fourth consecutive month in June at 3.36% on account of rise in prices of food articles, especially vegetables and manufactured items.

The government data released on Friday showed retail inflation increased to a four-month high of 5.08% in June as food items, including vegetables became dearer.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday, as they purchased shares worth ₹4,021.60 crore, according to exchange data.

On Tuesday, the Rupee appreciated four paise and settled at 83.43 against the greenback.

The Rupee depreciated 17 paise against the U.S. dollar and settled at 83.60 (provisional) on June 26, weighed down by the strength of the American currency in the overseas market and elevated crude oil prices.

“However, a firm trend in domestic equities, wherein benchmark indices scaled new peaks, supported the local unit and restricted the downslide,” forex traders said.

At the interbank foreign exchange market, the local unit opened at 83.45 and hit the intraday high of 83.43 and a low of 83.61 against the greenback during the session. It finally settled at 83.60 (provisional) against the dollar, 17 paise lower than its previous close. On Tuesday, the Rupee appreciated four paise and settled at 83.43 against the greenback.

“We expect the Rupee to trade with a slight negative bias on dollar demand ahead from oil importers as we are heading towards the end of the month. A strong dollar and elevated crude oil prices may also put downside pressure on the Rupee,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.

“However, positive domestic markets and Foreign Institutional Investor (FII) and foreign inflows may support the Rupee. USDINR spot price is expected to trade in a range of ₹83.30 to ₹84,” Mr. Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.22% higher at 105.83. Brent crude futures, the global oil benchmark, were trading 0.80% higher at $85.69 per barrel.

In the domestic equity market, the 30-share BSE Sensex rose 620.73 points, or 0.80%, to close at a new peak of 78,674.25 points. The broader NSE Nifty settled 147.50 points or 0.62%, higher at a record 23,868.80 points.

FIIs were net buyers in the capital markets on June 25, as they purchased shares worth ₹1,175.91 crore, according to exchange data.

Meanwhile, Reserve Bank Governor Shaktikanta Das on Tuesday asserted that the high interest rates are not impeding growth, and made it clear that the monetary policy will “unambiguously” focus on getting down inflation going forward.

“The country is at the threshold of a “major structural shift” in its growth trajectory and is moving towards a path where 8% real GDP growth can be sustained on a yearly basis,” Mr. Das said, addressing an event by Bombay Chamber of Commerce and Industry.

At the interbank foreign exchange market, the local unit opened strong at 83.39 and moved in the range of 83.34 and 83.48 against the greenback during the session.
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The Rupee paired its initial gains and settled one paisa lower at 83.44 (provisional) against the U.S. dollar on June 19 in sink with the domestic equity markets that turned choppy at the fag-end of the session.

Forex traders said the gaining momentum in the local unit was snapped by a firm American currency and higher level of crude oil prices in the overseas market.

At the interbank foreign exchange market, the local unit opened strong at 83.39 and moved in the range of 83.34 and 83.48 against the greenback during the session. The local unit finally settled at 83.44 (provisional) against the American currency, registering a loss of 1 paisa from previous closing level. On June 18, the Rupee had settled 12 paise higher at 83.43 against the U.S. dollar.

Jateen Trivedi, V-P Research Analyst – Commodity and Currency, LKP Securities, said the Rupee traded on a volatile note, showing strength at the opening but giving up gains as the dollar index found support near 104.80. “The Rupee is anticipated to continue trading in a volatile range between 83.25-83.60.”

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.01% at 104.88.

Analysts said the dollar index fell initially as the U.S. data showed the growth in retail sales was lower than expected, though the currency recovered with May industrial output numbers topping the forecast.

Officials of the U.S. Federal Reserve also indicated a hawkish stance to continue, dousing hopes of an interest rate cut until December. Brent crude futures, the global oil benchmark, declined 0.13% to $85.22 per barrel.

In the domestic equity markets, the 30-share BSE Sensex inched up 36.45 points, or 0.05% to 77,337.59 points. The broader NSE Nifty fell 41.90 points or 0.18%, to 23,516.00 points. Both the indices touched their fresh peak levels during intra-day.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday, as they purchased shares worth ₹2,569.40 crore, according to exchange data.

Analysts attributed the strong FII buying to the firm domestic macroeconomic outlook and a sharp fall in the U.S. treasury yield. The government data released on Tuesday showed the net direct tax collection grew 21% to more than ₹4.62 lakh crore so far this fiscal on higher advance tax payments by corporates, reflecting robust economic activity.

Fitch Ratings on Tuesday raised India’s growth forecast for the current fiscal to 7.2%, from 7% projected in March, citing a recovery in consumer spending and increased investment.

On May 30, Rupee gained 11 paise to close at 83.29 against the U.S. dollar.
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The Rupee paired all its early gains and settled with a steep loss of 20 paise at 83.49 (provisional) against the U.S. dollar on May 31 amid volatile domestic equity markets and unabated outflow of foreign funds.

Forex traders said increased month-end demand of greenback by oil marketing companies also weighed on the Indian currency even as it found some support due to lower level of crude oil prices.

At the interbank foreign exchange market, the local unit opened at 83.25 and oscillated between the intra-day high of 83.23 and lowest level of 83.49 during the session. It finally settled at 83.49 (provisional), registering a loss of 20 paise from its previous closing level. On May 30, Rupee gained 11 paise to close at 83.29 against the U.S. dollar.

Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas, said the Rupee depreciated on month-end dollar demand from oil marketing companies and importers.

“We expect Rupee to trade with a slight negative bias on overall strength in the U.S. dollar amid safe haven demand on the back of geopolitical tensions in the Middle East.”

“Volatility in the domestic markets amid uncertainty over election results may also put downside pressure on the Rupee. However, positive tone in global markets today may support the Rupee at lower levels,” Mr. Choudhary said.

Traders are expected to take cues from the upcoming domestic GDP data and fiscal deficit numbers and personal consumption expenditure price index from the U.S. “USD-INR spot price is expected to trade in a range of ₹83.10 to Rs 83.70,” Mr. Choudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.02% lower at 104.64.

According to analysts, U.S. dollar declined after the latest U.S. GDP data released on Thursday showed the world’s largest economy grew at a slower pace of 1.3% against the projected 1.6% in the January-March quarter. This triggered expectations of interest rate reduction by the Federal Reserve. Brent crude futures, the global oil benchmark, fell 0.44% to $81.50 per barrel.

On the domestic equity market, the 30-share BSE Sensex rose 75.71 points, or 0.10% to close at 73,961.31 points. The broader NSE Nifty went up 42.05 points or 0.19% to close at 22,530.70 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, selling shares worth ₹3,050.15 crore, according to exchange data.