Rupee snaps 2-week losing streak; closes at 53.56 Vs dollar
Mumbai: The Indian rupee snapped its two-week of losing string and appreciated by 28 paise to close the shortened week at 53.56 against the Greenback on fresh dollar selling by exporters and some banks, despite weak local equities amid fresh capital outflows.
The Forex market was closed for two days on October 24 and 26 for observing 'Dussera' and 'Idd-Ul-Zuha', respectively. In three days of trading, the rupee has gained for two days while lost on Tuesday.
In a narrow range of trading at the Interbank Foreign Exchange (Forex) market, the rupee commenced the week lower at 53.90 a dollar from last weekend's close of 53.84 and moved in a breadth of 53.34 and 53.91 before settling the week at 53.56, showing a rise of 28 paise, or 0.52 percent. In the last two week, it had tumbled by 199 paise, or 3.84 percent.
Renewed dollar selling by exporters and some banks on hopes of further fall in dollar value overseas mainly weighed on the rupee.
Dealers are also waiting for the outcome of the RBI's second quarter monetary policy review meeting on October 30.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) Pvt Ltd said, "The week started on a firm note and had erased some of the previous weeks loses on the very first day itself, but the INR pared gains on Tusday in a relatively short week.
"The Reserve Bank of India may cut cash reserve ratio at least by 25 bps to infuse more liquidity into the banking system while holding its lending rate steady next week as inflation remains uncomfortably high. The RBI policy meet on October 30 is the most sought after event of the week which shall guide both the equity and the currency markets".
"The government through its policy decisions in the last one month has initiated its process and now the next move for strengthening those reforms lies with the RBI as only a conjoined effort from both can induce sustainable growth in economy. A CRR cut shall induce sharp gains in INR which has been trading on a weak note tracking weak global cues and tad equity markets," he added.
"The disappointment if any from RBI shall fuel up the weakening spree but the ample liquidity in global markets shall contain such weakness. The crucial levels for INR appreciation are 52.70 levels and for depreciation the 55.30 levels can be closely watched as rise above 55.30 levels shall weaken the pair till 55.70 levels," he further commented.
RBI fixed the reference rate for US dollar and euro at Rs 53.6300 and Rs 69.7455 from Rs 53.7175 and Rs 70.1690 last weekend, respectively.
The rupee premium for the forward dollar remained weak on sustained receivings by exporters.
The benchmark six-month forward dollar payable in March finished lower at 132-1/2-134-1/2 paise from last weekend's close of 135-1/2-137-1/2 paise and far-forward contract maturing in September also ended down at 271-273 paise from 274-276 paise.
The rupee moved down further against Pound Sterling to end the week at 86.44 from preceding weekend's level of 86.37, while recovered against euro to close at 69.63 from previous weekend's level of 70.23.
It, also bounced back against the Japanese yen to 66.85 per 100 yen from last weekend's close of 68.03.