Rupee falls 16 paise on dollar buying by banks

Brent crude futures, the global oil benchmark, rose 2.16 percent to USD 40.12 per barrel

Mumbai: The rupee depreciated by 16 paise to close at 73.29 against the US dollar on Monday due to dollar buying by banks.

The Indian currency opened at 73.16 at the interbank forex market and touched an intra-day high of 73.08 and a low of 73.41 against the greenback.

It finally settled at 73.29, down 16 paise over its last close of 73.13 a dollar.

Weak US dollar, strong Asian currencies supported by improved risk appetite lent support initially,” Sriram Iyer, Senior Research Analyst at Reliance Securities said.

The Reserve Bank of India’s presence amid expectations of more investment flows in the coming sessions capped gains in the currency this Monday, Iyer added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.17 percent to 93.68.

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On the domestic equity market front, the BSE benchmark Sensex settled higher by 276.65 points or 0.71 percent at 38,973.70. The broader NSE Nifty rose 86.40 points or 0.76 percent to close at 11,503.35.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,632.25 crore on a net basis on Thursday, according to provisional exchange data.

Forex and equity markets were closed on Friday on account of Mahatma Gandhi Jayanti.

Brent crude futures, the global oil benchmark, rose 2.16 percent to USD 40.12 per barrel

The dollar buying by the banks and foreign fund outflows in September weighed on the rupee,” said Devarsh Vakil, Deputy Head Retail Research, HDFC Securities.

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According to depositories data, foreign investors withdrew Rs 3,419 crore on a net basis from Indian markets in September.

Going ahead, the biggest driver for rupee movement will be foreign fund inflows in Reliance group firms and how the central bank manages that flow, Vakil noted.

Further, the improvement in the health condition of US President Donald Trump’s lowered political uncertainties and expectation of the US fiscal stimulus supported the risk-on sentiments.

Investors will now be looking to vice-presidential nominees Mike Pence and Kamala Harris’ debate on Wednesday. Investors will also be monitoring remarks from US Federal Reserve Chairman Jerome Powell, who is scheduled to deliver a keynote address at the NABE conference on Tuesday, Reliance Securities’ Iyer said.

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