Rupee opens higher, easing from record closing lows; opens at 88.69/$

Indian Rupee today: The domestic currency opened six paise higher at 88.69 on Tuesday against the greenback

The Indian rupee gained on Tuesday, a day after closing at a record low, as the Monetary Policy Committee (MPC) continued deliberations on its key interest rate decision.

 

The domestic currency opened six paise higher at 88.69 on Tuesday against the greenback, according to Bloomberg. The currency fell 3.62 per cent so far this year, while it hit an all-time low of 88.79 last week. 

 

The Indian rupee is likely to open flat today after hitting a new closing low on Monday, though the Reserve Bank of India (RBI) intervention capped losses at 88.80, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. 

   

Foreign portfolio investors (FPIs) remain net sellers, pressuring equities, while the absence of progress on the Indo-US trade treaty has kept markets cautious ahead of the RBI policy outcome tomorrow, Bhansali said.  

 

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.  

 

Some inflows from WeWork anchor investors and Nifty rebalancing could lift the rupee towards 88.60, but heavy dollar demand continues to absorb dips, Bhansali said. "Importers are advised to buy on declines, while exporters may wait before selling forward."

 

Meanwhile, government bond yields rose on Monday due to the Centre’s increased borrowings through the 10-year bond in the October-March borrowing plan. The yield on the benchmark 10-year government bond settled at 6.55 per cent. 

 

Meanwhile, the dollar index was stable at 98.03 levels as traders reacted to concerns about a possible US government shutdown from October 1. The measure of the greenback against a basket of six major currencies was up 0.09 per cent at 97.96.

 

In commodities, crude oil prices fell after US President Donald Trump and his Israeli counterpart Benjamin Netanyahu agreed to a 20-point plan to end the war in Gaza. Brent crude price was down 0.79 per cent at 67.43 per barrel, while WTI crude prices were lower by 0.79 per cent at 62.95 per barrel, as of 9:05 AM IST.