You are here: Home » PTI Stories » National » News
Business Standard

Rupee in recovery mode, gains 11 paise on easing inflation

Press Trust of India  |  Mumbai 

Staging a smart recovery after yesterday's plunge, the rupee today rebounded by 11 paise to close at 64.33 per on easing retail

However, a weak global sentiment amid fears of an imminent US central along with disappointing IIP numbers caused some discomfort for the rupee and restricted the gains.

Lacklustre local equities along with modest capital outflows too weighed on the currency trade.

The domestic unit resumed virtually steady at 64.44 at the market but soon drifted to a fresh low of 69.49 owing to renewed dollar demand from importers.

However, the rupee made a solid rebound in late afternoon trade following dollar selling by exporters and managed to close at 64.33, a good gain of 11 paise, or 0.17 per cent.

The domestic currency had plunged by 20 paise yesterday to hit a one-week low.

traders remained cautious ahead of the US Federal Reserve's policy decision on Wednesday in which it is widely expected that it will hike benchmark for the second time this year.

Foreign funds sold shares worth Rs 169.25 crore yesterday, as per the provisional data from exchanges.

On the macro-economic front, retail fell to record low of 2.18 per cent in May driven by sharp drop in food prices, strengthening government's case for lowering of by the RBI at its next policy meet in August.

Earlier this month, the RBI had left key unchanged as it wanted to be more sure that will stay subdued.

But industrial production growth slipped to 3.1 per cent in April from 6.5 per cent a year ago.

The market benchmark Sensex started lower today, but quickly rebounded to hit the day's high of 31,260.77 after data showed retail inflation is on the way down.

On the global front, the greenback traded little changed as traders awaited the start of a two-day meeting of the US Fed for signals on the pace of future monetary tightening.

The dollar index, which tracks the US currency against a basket of six major rivals, was down 0.13 per cent at 97.02.

In cross-currency trades, the rupee fell back modestly against the pound sterling to settle at 81.87 from 81.83 per pound, but recovered against the euro to end at 72.13 from 72.36 yesterday.

The local unit also recouped some lost ground against the Japanese yen to finish at 58.45 per 100 yens from 58.66 earlier.

In forward market today, premium for dollar showed a mixed trend owing to lack of market moving factors.

The benchmark six-month premium payable in November was quoted steady at 136-138 paise, while the far forward May 2018 contract moved down further to 279-281 paise from 280-282 paise on Monday.

On the International commodity front, crude oil prices rebounded slightly on Tuesday after Saudi Arabia said it would make significant export cuts in July amid signs of a drawdown in US crude inventories, though rising US output continues to weigh on the market.

The brent crude futures were at USD 48.64 per barrel in early Asian trading.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, June 13 2017. 18:58 IST