Rupee pulls back further from 80 per US dollar as FII selling eases
Premium- On Tuesday, the rupee for the first time declined to the low level of 80 against the US dollar in intra-day spot trading
The rupee today edged higher to 79.93 per US dollar amid firm domestic equity markets and recent easing of the greenback against other major currencies. Firm stock markets, foreign fund inflows into equities and easing in dollar index and suspected RBI intervention helped the rupee come off Tuesday's record low of 80.06.
On Tuesday, the rupee for the first time declined to the low level of 80 against the US dollar in intra-day spot trading before ending the session at 79.95.
"Significant dollar demand from oil importers amid elevated crude oil prices as well as concerns about swelling trade deficit have also been the key catalysts behind the steep descent seen in the Indian currency, wherein it has breached past the pivotal 80 mark," says Sugandha Sachdeva, Vice President - Commodity and Currency Research, Religare Broking Ltd
Though the dollar index has eased in recent days, it remains at elevated levels.
“FPI selling appears to have bottomed out. FPIs have bought 5 days this month. The dollar index declining to 106.6 from above 108 is likely to persuade FPIs to buy rather than sell," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth ₹976 crore. FIIs bought shares worth ₹156.08 crore on net basis on Monday.
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