Rupee ends almost flat against US dollar
Orders dried up as a result of this, they said, adding that this created a heightened uncertainty in the forex market, causing excess volatility in the Indian rupee, which was avoidable.
Mumbai: The rupee retreated from high levels on Friday to close with a modest gain of 1 paisa at 83.28 against the US dollar amid a weak American currency overseas and positive domestic equity markets.
Unabated foreign capital outflows and rising crude prices kept the local currency under pressure, forex traders said.
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At the interbank foreign exchange, the rupee opened at 83.28 and plunged to 83.49 against the greenback during intra-day. The domestic currency also hit a high of 83.28.
It finally settled at 83.28 against the dollar, registering a gain of just 1 paisa from its previous close.
Investors were also cautious ahead of industrial output and inflation data, traders said.
“Expectation is that the (inflation) number could come in lower and that could trigger volatility for the currency. We expect the USD/INR (Spot) to trade with a positive bias and quote in the range of 82.20 and 82.50,” said Gaurang Somaiya, forex and bullion analyst Motilal Oswal Financial Services On Thursday, the rupee closed at 83.29 against the American currency.
Trading in the forex market was impacted on Friday as one of the platforms suffered an outage.
One of the electronic trading platforms suffered an outage around midday during the trading hours due to which players were unable to log into the system, according to sources.
Orders dried up as a result of this, they said, adding that this created a heightened uncertainty in the forex market, causing excess volatility in the Indian rupee, which was avoidable.
A source said the Reserve Bank of India has asked the platform to undertake a “root cause analysis” and “ascertain whether it was a system failure or human error that led to the disruption” on the platform.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.02 per cent at 105.89.
Brent crude futures, the global oil benchmark, rose 0.81 per cent to USD 80.66 per barrel.
“…Volatility in the domestic currency is almost dead on interventions. Thus, a sudden spurt in the USD/INR pair on the upside is possible.
“The USD/INR pair is expected to trade range-bound with a slight positive between Rs 83 and Rs 83.75 unless the US bonds rally sharply,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
On the domestic equity market front, the BSE Sensex closed 72.48 points or 0.11 per cent higher at 64,904.68 points. The broader NSE Nifty advanced 30.05 points or 0.15 per cent to 19,425.35 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Friday as they offloaded shares worth Rs 261.81 crore, according to exchange data.
