Rupee Settles 3 Paise Lower At 88.75 Against Dollar

Mumbai – Rupee consolidated in a narrow range and settled for the day lower by 3 paise at 88.75 against the US dollar on Monday, on persistent foreign capital outflows and rise in risk-off sentiments.

Forex traders said rupee is hovering near its all-time low level as investors remained concerned over global trade uncertainties and impact of US visa fee hike on India's IT services exports.

Moreover, the Reserve Bank of India (RBI) policy meeting outcome on October 1, is expected to influence rupee and government bond movements.

At the interbank foreign exchange, the rupee opened at 88.69 against the US dollar, and traded in the range of 88.69-88.81. It finally settled for the day at 88.75, registering a loss of 3 paise.

On Friday, the rupee rebounded from its all-time low to close 4 paise higher at 88.72 against the US dollar.

The rupee fell to its lifetime low of 88.76 against the American currency on September 25.

“We expect the rupee to remain weak on weak domestic markets and elevated crude oil prices. Month-end dollar demand from importers may also pressurise the rupee. However, weakness in the US dollar and any intervention by the RBI may support rupee at lower levels,” said Anuj Choudhary, Research Analyst Currency and commodities Mirae Asset ShareKhan.

Choudhary added that traders may take cues from core pending home sales data from the US and President Donald Trump's speech. Investors will also watch out for the RBI's MPC decision this week.

Dilip Parmar, Research Analyst, HDFC Securities, said,“​The rupee... exhibited marked underperformance among Asian currencies. This depreciation is attributable to sustained month-end demand for the US dollar and significant outflows of foreign institutional funds from domestic equity markets, collectively dampening investor sentiment.

“In the near-term outlook for the spot USD/INR pair remains bullish with critical support at 88.25 and key resistance at 89.10,” he added.

The Reserve Bank's Monetary Policy Committee began its three-day deliberations amid expectations of status quo on the key interest rate, but some experts think that the central bank may settle for a 25 bps cut.

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