Rupee rises to 83.24 against US dollar in early trade, up 6 paise.

October 16th 2023.

Rupee rises to 83.24 against US dollar in early trade, up 6 paise.
On Monday, the Indian rupee made a positive start to the day, appreciating 6 paise to 83.24 against the US dollar. This was driven by encouraging macroeconomic data which included lower domestic inflation, higher industrial production figures, and a narrowing trade deficit. However, investor sentiment was damped by the escalating Israel-Hamas conflict.

At the interbank foreign exchange, the domestic unit opened at 83.25 against the dollar before making an early high of 83.24. This was in stark contrast to the rupee's performance on Friday, when it had fallen 6 paise to close at 83.30 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.10 per cent down at 106.53. Brent crude futures, the global oil benchmark, advanced 0.11 per cent to USD 90.99 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 161.12 points or 0.24 per cent lower at 66,121.62, while the broader NSE Nifty declined 36.10 points or 0.18 per cent to 19,714.95. Foreign Institutional Investors were net buyers in the capital markets on Friday, purchasing shares worth Rs 317.01 crore.

Commenting on the rupee's performance, CR Forex Advisors MD-Amit Pabari said that a mild risk-off stance was supporting USD demand, but positive economic data and RBI intervention were allowing the rupee to stay within a range of 83.05 and 83.30.

The Indian forex reserves took a hit this week, dropping by USD 2.166 billion to USD 584.742 billion as per the RBI data released on Friday. This was in addition to the USD 3.794 billion fall reported in the previous week.

Fortunately, these losses were offset by the release of government data on Thursday which stated that India's retail inflation had moderated to a three-month low of 5 per cent in September, while factory output in August had soared to a 14-month high of 10.4 per cent. The data provided a much-needed boost to the rupee, and its value against the US dollar.

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