Rupee Moves Higher To End At 72.67 Against Dollar: 10 Things To Know
The rupee moved higher by 22 paise – or 0.3 per cent – against the dollar to end at 72.67 on Tuesday, boosted by easing crude oil prices and strong macroeconomic data. A nearly 3 per cent decline in crude oil prices, dragging them over 20 per cent from October highs, eased concerns on the current account deficit front. Fund inflows, weakness in the dollar against major peers overseas and a nearly 1 per cent recovery in domestic stock markets pushed the rupee higher, according to analysts.
Here are 10 things to know:
The rupee opened higher at 72.81 against the greenback, and rose by as much as 38 paise to hit 72.51 during Tuesday’s session.
Crude oil prices fell by as much as $1.97 a barrel – or 2.8 per cent – on Tuesday to trade at $68 a barrel levels, after US President Donald Trump put pressure on the OPEC or Organization of the Petroleum Exporting Countries not to cut supply to prop up the market.
Brent – the global benchmark for crude oil – has declined more than 20 per cent from peaking at four-year highs in early October this year. Analysts say concerned about oversupply and US-China trade war weighed on oil prices.
“The dollar inflow related to FDI (foreign direct investment) in hospital sector added strength in rupee during the day. Recent macroeconomic data also cheered Rupee bulls,” said VK Sharma, head PCG and capital markets group, HDFC Securities.
The political malaise in Europe failed to aid the dollar against a basket of currencies. At 5:30 pm, the dollar index – which measures the greenback against six major peers – was down 0.1 per cent at 97.4. It had hit 97.7 on Monday – its highest since June 2017.
Retail inflation rate, which includes food and energy prices, dropped sharply in October to 3.31 per cent on a year-on-year basis, the slowest pace in 13 months and below the Reserve Bank of India’s (RBI) medium-term target of 4 per cent for a third straight month, official data showed on Monday evening.
Taking comfort from easing inflation, the RBI is unlikely to raise key lending rates in its upcoming December review, say economists.
Separate data, released on the same day, showed growth in industrial production – or factory activity – stood at 4.5 per cent in September, as against an upwardly revised 4.7 per cent in the previous month.
Domestic stock markets registered gains of almost 1 per cent on Tuesday, with the Sensex settling 331 points higher and the Nifty advancing 100 points to 10,582. The markets recovered most of the losses registered in the past two consecutive sessions.
The rupee is still down 13.8 per cent against the American currency so far this year.
