Rupee Holds Steady Against Dollar Despite Rising Oil Prices

Rupee Holds Steady Against Dollar Despite Rising Oil Prices

VoM News Desk | October 9, 2023 | 11:50 AM IST | Breaking News | Follow on Google News

Rupee Holds Steady Against Dollar Despite Rising Oil Prices

Rupee Holds Steady Against Dollar Despite Rising Oil Prices

The Indian rupee exhibited resilience against the US dollar, even as crude oil prices surged. Traders held onto hope that the Reserve Bank of India (RBI) would prevent the rupee from plunging to its all-time low. The local currency opened 3 paise higher at 83.22 against the dollar, compared to the previous day’s closing rate of 83.25.

Dollar Strength and Market Volatility Impact Rupee

Despite a slight gain against the dollar, the rupee remained range-bound, influenced by the greenback’s strength in the global market and a downward trend in domestic equities. The rupee had concluded the previous trading session at 83.25 against the US dollar, with memories of its lifetime low of 83.29 in October 2022 still fresh. Meanwhile, Brent crude futures, the global oil benchmark, surged by 3.13% to reach $87.23 per barrel.

Market Sentiments and RBI’s Vigilance

Market sentiment became fragile following clashes between Israeli forces and Hamas, coupled with a surprise attack on Israel by militants, marking a historic escalation in violence in the Middle East. Amit Pabari, MD of CR Forex Advisors, highlighted that global tensions were boosting the safe-haven dollar, while the RBI’s vigilant stance was creating a tug-of-war in the currency market. The USD/INR pair faced significant resistance at the 83.30 level, while also finding support at 82.80. This created a scenario akin to a tug-of-war, where a breach of either pivotal level could trigger a substantial movement, estimated at approximately one rupee in either direction.

In the domestic equity market, the BSE Sensex declined by 274.33 points or 0.42%, closing at 65,721.30, while the broader NSE Nifty fell by 84.10 points or 0.43% to reach 19,569.40.

Foreign Institutional Investors (FIIs) were net sellers in the capital market, offloading shares worth ₹90.29 crore on the last trading day. In contrast, Domestic Institutional Investors (DIIs) net purchased shares amounting to ₹783.25 crore, according to provisional data available on the exchanges.

VoM News Desk

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