Home / News / India /  Rupee rises amid weak US dollar, ease in crude oil prices
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The rupee appreciated 9 paise to 79.81 against the US dollar in early trade on Monday, supported by the fall in crude oil prices. Retreating from its all-time high of 80 per US dollar, the domestic currency opened at 79.86 against the US dollar and witnessed a high of 79.81 and a low of 79.87 in Monday's early deals. In the previous session, the rupee had closed at 79.90.

US dollar edged higher on Friday as demand for safe haven assets increased amid decline in appetite for riskier assets. Further, data showed US business activity shrank for the first time in nearly 2 years in July.

Rupee is expected to appreciate today amid weakness in dollar and ease in crude oil prices. Further, RBI governor Das said Indian economy is relatively better placed amid grim global scenario and has zero tolerance for volatile and bumpy movement of rupee. However, sharp gains may be prevented on pessimistic global market sentiments. US$INR (July) is expected to trade in a range of 79.70- 80.15," said ICICI Securities in a note.

The Reserve Bank of India (RBI) has zero tolerance for volatile and bumpy movements in the rupee and will continue to engage with the foreign exchange market to ensure the rupee finds its appropriate level, said governor Shaktikanta Das had said last week.

The rupee has depreciated around 8% since the beginning of this year and has been hitting new record lows against the US dollar since the past few sessions. The currency crossed the 80 level on the back of monetary policy tightening and the consequent FPI outflows from capital markets. India’s widening trade gap and capital outflows have also raised the risks for the domestic currency.

Foreign Portfolio Investors (FPIs) had been selling equities in the Indian markets for the past nine-to-ten months barring the latest buying due to various reasons, including tightening of monetary policy in advanced economies, and rising dollar and bond yields in the US.

Indian rupee may further depreciate to 82 to a dollar in the near term due to widening of trade deficit and expected aggressive rate hike by the US Fed later this week to tame record high inflation, as per analysts. 


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