Rupee sees slight dip after record inflation print; opens lower at 88.65/$

Indian Rupee today: The domestic currency opened 2 paise lower at 88.65 against the greenback on Thursday

The Indian Rupee traded slightly lower on Thursday, showing little reaction to a record-low inflation reading. Globally, sentiment improved after the US President signed a bill ending the longest-ever government shutdown.

 

The domestic currency opened 2 paise lower at 88.65 against the greenback on Thursday, according to Bloomberg. The Rupee has risen 0.11 per cent this month, while it has fallen 3.58 per cent this year, Asia’s second-worst performing currency.  

 

India's retail inflation eased sharply to a record low of 0.25 per cent in October from 1.44 per cent in September, thanks to a favourable base effect, a record 5 per cent drop in food prices, and the initial impact of GST rates’ rationalisation. The sharp decline in inflation is expected to give the Reserve Bank of India’s Monetary Policy Committee room to consider an interest rate cut at its December meeting.

 

In rural India, retail prices slipped into a deflationary zone with the NSO reporting a 0.25 per cent drop in the CPI (Rural), compared to a 1.07 per cent increase in September. Urban inflation, on the other hand, moderated from 1.83 per cent in September to 0.88 per cent in October. 

 

The government announced a ₹45,060 crore package to boost exports, with a total outlay of ₹25,060 crore over six years starting this fiscal. The initiative aims to enhance India’s export competitiveness, particularly for micro, small and medium enterprises (MSMEs), first-time exporters, and labour-intensive sectors, analysts said. 

 

The rupee continues to face selling pressure at higher levels, with possible intervention from the Reserve Bank of India (RBI), Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. Key drivers for the rupee remain US tariff policies, India’s trade negotiations, RBI actions, global risk sentiment, and overall dollar strength, Bhansali said. 

 

Meanwhile, in the US, the record shutdown came to an end as the House passed the spending bill, resolving uncertainties ranging from food aid to the release of key economic data points. The October jobs and consumer price index reports are unlikely to be released due to the government shutdown, White House Press Secretary said.

 

With the government shutdown set to end, the dollar index was trading flat on Thursday. The index was down 0.01 per cent at 99.48.  

 

In commodities, crude oil prices were lower amid pressure from a persistent selloff triggered by OPEC’s latest supply outlook. Brent crude price was down 0.13 per cent at 62.63 per barrel, while WTI crude prices were lower by 0.21 per cent at 58.36 per barrel, as of 9:00 AM IST.