Rupee weakens despite decline in dollar and oil prices; ends at 88.66/$

Indian Rupee today: The domestic currency closed 3 paise lower at 88.66 against the greenback on Thursday

The Indian Rupee weakened for a second straight session on Thursday, even as the dollar and crude oil prices declined, while data showed a sharp fall in inflation.

 

The domestic currency closed 3 paise lower at 88.66 against the greenback on Thursday, according to Bloomberg. The Rupee has risen 0.10 per cent this month, while it has fallen 3.57 per cent this year, Asia’s second-worst performing currency.  

 

Rupee traded flat in a narrow range near 88.67, as market participants remained cautious ahead of the Bihar election outcome due Friday morning, leading to a muted trading session, Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said. 

 

Additionally, traders awaited the release of US CPI data, which is expected to influence dollar index movements and, consequently, rupee trends, Trivedi said. "With limited triggers in the interim, the rupee is likely to stay range-bound, with the trading range expected between 88.40-88.95."

 

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. 

 

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 lower on Thursday. The index was down 0.20 per cent at 99.29.  

 

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 0.29 per cent at 62.53 per barrel, while WTI crude prices were lower by 0.31 per cent at 58.29 per barrel, as of 3:35 PM IST.