Rupee Slides 2 Paise Amidst Strong US Dollar and Global Events

Rupee Slides 2 Paise Amidst Strong US Dollar and Global Events

VoM News Desk | November 1, 2023 | 11:29 AM IST | Breaking News | Follow on Google News

Rupee Slides 2 Paise Amidst Strong US Dollar and Global Events

Rupee Slides 2 Paise Amidst Strong US Dollar and Global Events

The Indian rupee depreciated by 2 paise against the US dollar in the morning session on Wednesday. This slide is attributed to a strong American currency overseas and a subdued trend in domestic equities. The local currency opened at 83.27 against the dollar, marking a 2 paise decrease compared to the previous day’s close at 83.25.

Global Factors Affecting Rupee

The dollar index, which measures the strength of the greenback against a basket of six currencies, was trading slightly higher by 0.04% at 106.70. This upward movement of the dollar has impacted the rupee’s performance. Additionally, persistent foreign fund outflows have also weighed on the local unit.

Stability Amidst Global Events

Notably, in October, the USD/INR pair exhibited an unusual trend with a narrow monthly intraday trading range, mainly hovering around 83.25, varying by just one or two paise above or below. This stability is noteworthy considering significant global events such as the Israel-Palestine conflict, a strong US Dollar Index (US DXY), and elevated US 10-year bond yields. Experts suggest that such low volatility often signals the potential for increased volatility in the near future.

Economic Indicators

In addition to global factors, India’s economic indicators are also influencing the rupee’s performance. The country’s fiscal deficit has reached 39.3% of the full-year target for the first half of the current financial year, slightly higher than the 37.3% recorded in the same period of the previous year. Moreover, the growth of eight key infrastructure sectors has slowed down to a four-month low of 8.1% in September 2023, compared to 8.3% in the same month a year ago.

Domestic Equities and Foreign Investments

On the domestic front, the BSE Sensex and NSE Nifty are showing mixed trends, with the Sensex trading lower by 0.20%, while the Nifty is down by 0.16%. Foreign institutional investors were net sellers in the capital market on Tuesday, offloading shares worth ₹696.02 crore.

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VoM News Desk

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