The rupee depreciated for the second consecutive day and fell 12 paise to close at 94.93 (provisional) against the US dollar on Friday, October 23, pressured by rising crude prices and sluggish domestic equities, PTI reported in The Hindu BusinessLine. At the interbank foreign exchange market, the rupee opened at 94.78, touched an intra-day low of 94.98 and settled at 94.93 (provisional); on Thursday it had slumped 43 paise to close at 94.81.
Informist's rupee review put Friday's settlement at 94.94 a dollar, down from the previous close of 94.8175, and said the unit traded in a 22-paise range during the day. "The RBI made strong efforts to hold the rupee around 94.95 a dollar, but there were heavy dollar bids today," a dealer at a private-sector bank told Informist, adding that a sharp surge in crude to over $114 a barrel fuelled dollar demand from importers while the RBI's persistent dollar sales limited the rupee's losses.
Oil, equities and the outlook
Forex traders said the rupee is likely to trade with a slight negative bias on global dollar strength and Brent crude hovering near $114 a barrel, with renewed Saudi-Houthi tensions threatening to keep oil markets volatile, PTI reported. On the domestic equity front, the Sensex declined 125.56 points to settle at 73,123.83 and the Nifty dropped 87.65 points to 22,600, the report said.
"We expect the rupee to trade with a slight negative bias on elevated crude oil prices amid escalation of tensions in West Asia and weakness in domestic markets. Selling FIIs may also pressurise the rupee. However, softening of US treasury yields and any fresh intervention by the RBI may support the rupee at lower levels," Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, told PTI, expecting the USD-INR spot price to trade in a range of 94.65 to 95.25. Informist noted the rupee was the least-depreciating currency among its Asian peers this week, supported by the RBI's recent measures, after touching a high of 94.3150 earlier in the week on foreign fund inflows.
What is solid
- PTI reported the rupee closed 12 paise lower at 94.93 (provisional) on Friday, October 23, its second straight daily fall, after a 43-paise fall to 94.81 on Thursday
- Informist independently reported heavy importer dollar demand as crude topped $114 a barrel and said RBI dollar sales limited the rupee's losses, putting settlement at 94.94
- Both reports link the pressure to Brent crude near $114 a barrel amid Saudi-Houthi tensions and to weak domestic equities
What is only claimed
- PTI's 94.93 close is labelled provisional; Informist put the settlement at 94.94 — a one-paise difference between the two market reports, with the final RBI reference rate to confirm