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Rupee ends flat at 73.45, initial gains erased by US dollar demand

The rupee opened higher at 73.33 amid sharp gains in local stock markets


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Press Trust of India Mumbai
The rupee ended almost flat at 73.45 against the US dollar Monday after its initial gains were erased by a late dollar demand from importers despite strong equity markets and the RBI's move to ease liquidity crunch.
Despite the initial bounce, the home unit appeared to struggle, as the dollar remained broadly firm.
Foreign investors also pulled out Rs 22.3079 billion from capital markets Monday amid the dollar hovering near 10-week high and hitting 96.66 against the basket of six global currencies.
The rupee opened higher at 73.33 amid sharp gains in local stock markets.
The local currency, however, gave up initial gains due to capital outflows and a firming dollar to hit a session low of 73.53.
The rupee made a comeback in the closing hour to settle at 73.45, showing gains of just 2 paise over the previous close.
Brent crude oil futures were down 31 cents at $77.31 a barrel, while WTI Futures fell by 28 cents to $67.31.
Meanwhile, market benchmark Sensex rallied over 718 points to end above the 34,000-level, while the broader 50-share Nifty rose over 220 points to close above 10,250.
At the same time, the Reserve Bank's decision to pump in Rs 400 billion into the system in November through purchase of government securities, with an aim to tackle liquidity crunch, failed to bring cheer to the forex market, but arrested any significant fall in the rupee.
In an another development, India and Japan Monday concluded a $75 billion bilateral currency swap agreement, a move that will help in bringing greater stability in foreign exchange and capital markets in the country.
"India and Japan has signed currency swap agreement worth $75 billion a step will go long way in soothing frayed nerves of Rupee bulls," said V K Sharma, Head PCG & Capital Markets Group, HDFC Securities.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 73.4181 and for rupee/euro at 83.6942. The reference rate for rupee/British pound was fixed at 94.2644 and for rupee/100 Japanese yen at 65.62.

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First Published: Oct 29 2018 | 6:10 PM IST

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