Rupee steady under pressure, trades near 88.74/$ amid tight range

Indian Rupee today: The domestic currency opened seven paise lower at 88.74 against the greenback on Tuesday

The Indian Rupee continued to trade under pressure in a tight range on Tuesday amid likely central bank interventions and rising crude oil prices.  

 

The domestic currency opened seven paise lower at 88.74 against the greenback on Tuesday, according to Bloomberg. The currency has fallen 3.66 per cent so far this year, the worst performing Asian curreny. 

 

The rupee touched 88.80 but was sold off, indicating the Reserve Bank of India's (RBI) discomfort with the rupee moving toward 89.00, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. 

   

Meanwhile, the one-month volatility in the dollar-rupee pair has crashed to the year’s lowest level this month, according to Bloomberg. The currency has remained in a narrow range, unable to breach the 89-per-dollar level after reaching fresh lows.

 

The rupee's strength is partly supported by improved sentiment following net foreign portfolio inflows (FPIs) into Indian equities in early October after months of heavy outflows, analysts said. The buying was modest at ₹2,830 crores, but there were notable acquisitions by foreign investors, including SMBC-Yes Bank, with another for RBL Bank reportedly in the works, Bhansali noted.

 

Trade tariffs remain a concern for investors, while an Indian trade team is in the US to continue and finalise talks, Bhansali said. "The rupee’s cautious appreciation and technical positioning near key levels such as 88.80 and 88.50 suggest a finely balanced market."

 

On Monday, India’s retail inflation moderated significantly in September to hit a 99-month low of 1.54 per cent, with food prices dropping 2.3 per cent from a year ago, marking the most benign print for the volatile and essential component of the household spending basket since December 2018.

 

The dollar index was slightly lower amid a flip-flop in US-China trade tensions. analysts said. The measure of the greenback against a basket of six major currencies was down 0.04 per cent at 99.22.

 

In commodities, crude oil prices remained higher on improving US-China relations and the end of the war in Gaza. Brent crude price was up 0.24 per cent at 63.47 per barrel, while WTI crude prices were higher by 0.24 per cent at 59.63 per barrel, as of 9:10 AM IST.