Indian rupee closed flat and ended 3 paise down to around 67.18/19 levels on spot against the US dolar on Tuesday as demand for dollar surged in global markets.
Indian rupee closed flat and ended 3 paise down to around 67.18/19 levels on spot against the US dolar on Tuesday as demand for dollar surged in global markets. However, the rally in domestic markets capped the fall.
The Sensex surged 181.45 points, or 0.66 per cent, to end at a new 11-month high of 27,808.14 on widespread gains ahead of release of key macroeconomic data — IIP for May and Consumer Price Index-based inflation (CPI) for June. The broader NSE Nifty recaptured the 8,500-mark and ended at 8.521.05, up 53.15 points or 0.63 per cent. Intra-day, it moved between 8,526.60 and 8,479.20.
The Indian currency surged 24 paise to close at 67.13 on persistent selling of US dollars by banks and exporters amid a huge rally in domestic equities on Monday.
Samir Lodha, MD, QuantArt Markets said,”Indian rupee is trading at at 67.15. It is time for importers to start increasing hedge ratio gradually again.”
Experts believe that state run banks may have been relentless buyers of dollar, fronting on behalf of the central bank.
“With Chinese Yuan sustaining at a six year low and Rupee having gained ground against its peers post Brexit, central bank may not be comfortable with further unilateral strength in the local unit. Hence, we can see them remain active buyers of dollars as it not only helps them to protect competitiveness of exports but also infuse structural Rupee liquidity in the system. Over the near term, we expect Rupee to trade within a range of 66.80/67.10 and 67.50/55 on spot,” Anindya Banerjee, currency analyst, Kotak Securities said.