Indian Rupee reverses early gains to close lower; ends at 88.75/$

Indian Rupee today: The domestic currency closed four paise lower at 88.75 on Monday against the greenback, according to Bloomberg

The Indian Rupee reversed early gains to end weaker on Monday as Reserve Bank of India’s (RBI’s) six-member Monetary Policy Committee (MPC) begins their meeting.

 

The domestic currency closed four paise lower at 88.75 on Monday against the greenback, according to Bloomberg. The currency fell 3.67 per cent so far this year, while it hit an all-time low of 88.79 last week. 

 

The rupee has come under pressure due to reduced RBI intervention, global dollar strength, and steep visa fee hikes, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. 

 

Continued capital outflows and geopolitical developments are expected to keep the currency under pressure, he said. The upcoming RBI policy meeting on 1 October is likely to influence both the rupee and government bond movements, he said.  

 

 

The premiums for rupee were steady with near term falling to 2 per cent while 1 year fell to 2.32 per cent, Bhansali said. "The range for rupee tomorrow is expected at 88.50 to 89.00."

  The MPC is expected to maintain the status quo at its October meeting, scheduled for September 29-October 1, according to a Business Standard poll. The domestic rate-setting panel kept the repo rate unchanged in August, following a 50-basis-point (bp) cut in June. Earlier, the panel had reduced the rate by 25 bps each in February and April after holding it steady for 11 consecutive meetings.  

 

Meanwhile, the Dollar index fell after posting two consecutive weeks of gains, with investors' focus now on the non-farm payrolls data later this week. The measure of the greenback against a basket of six major currencies was down 0.19 per cent at 97.96.

 

In commodities, crude oil prices fell over 1 per cent amid reports that Opec+ considered a larger November supply hike. Brent crude price was down 1.41 per cent at 69.14 per barrel, while WTI crude prices were lower by 1.66 per cent at 64.63 per barrel, as of 3:35 PM IST.