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Rupee recovers, opens 25 paise up against US dollar

The domestic unit fell 33 paise on Tuesday to finish at a fresh lifetime low of 74.39 against on high crude oil prices, strengthening of the greenback and unabated foreign fund outflows.

SI Reporter  |  New Delhi 

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The on Wednesday opened 25 paise up at 75.14 against the The domestic unit fell 33 paise on Tuesday to finish at a fresh lifetime low of 74.39 against on high crude oil prices, strengthening of the and unabated foreign fund outflows.

Government bonds on Tuesday declined sharply as the weakened to new lows amid a rise in oil prices as well as tightening US yields.

Forex dealers said besides strong demand for the American currency from importers, concerns over rising fiscal deficit and capital outflows weighed on the domestic currency.

Foreign institutional investors (FII) were net sellers to the tune of Rs 3,402 crore on October 8, 2018. have been net sellers to the more than Rs 14,807 crore in October 2018.

"The balance of payments (BoP) turning negative has led to a sharp depreciation in in the past two months. With steep depreciation over the past two months, the rupee is now the worst performing currency against the in Asia so far this year, down 13.4 per cent," PTI reported quoting global brokerage firm Nomura as saying in a research report.

Nomura further noted that policy responses to the depreciating currency have been muted thus far and with limited policy response, the concerns on the rupee have risen significantly.

On the global front, steadied in early Wednesday trade after world stocks hit eight-week lows the previous day on worries about global economic growth. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.3 per cent, while Japan's Nikkei gained 0.25 per cent. The Australian benchmark was up 0.11 per cent.

Oil prices edged lower after the IMF lowered its global growth forecasts but prices were supported as Hurricane Michael churned towards Florida, causing the shutdown of nearly 40 per cent of US Gulf of Mexico crude output, Reuters reported.

Back home, the S&P BSE Sensex opened 91 points higher at 34,391 while NSE's Nifty50 index opened at 10,333, up 31.50 points.

First Published: Wed, October 10 2018. 09:19 IST
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