Rupee closes at new low of 95.09 vs US dollar amid crude price rise

The currency depreciated nearly 0.2 per cent on Monday to settle at new closing low of 95.09 against the US dollar

The Indian rupee depreciated nearly 0.2 per cent on Monday to settle at a new low of 95.09 against the US dollar, tracking the rise in crude oil prices, said dealers. Market participants said the Reserve Bank of India (RBI) likely intervened in the foreign exchange market via dollar sales to curb excess volatility. 

 

The domestic currency reversed early gains that had followed the Bharatiya Janata Party’s (BJP) victory in West Bengal, as the initial optimism in currency markets proved short-lived, they said. 

 

The rupee had settled at 94.92 per dollar on Thursday. The domestic currency has depreciated by 5.48 per cent against the dollar in the current calendar year, while it has weakened by 0.29 per cent in the current financial year.

 

 

“The Indian rupee has hit a record low as the dollar recovers and crude oil prices hold firm. This ongoing surge in oil prices, combined with foreign fund outflows, is putting a visible strain on India's trade balance and broader economy. Persistent dollar demand is expected to keep the pressure on the rupee in the short term, driving the rupee higher toward the 95.35 and 95.70 level,” said Dilip Parmar, senior research analyst, HDFC Securities. 

 

Meanwhile, market participants said that the RBI may be considering a scheme on the lines of the Foreign Currency Non-Resident (FCNR) deposit window it had introduced in 2013. The programme, launched during the taper tantrum episode, had helped mobilise around $38 billion over three years by incentivising banks to attract dollar deposits from non-resident Indians.

 

“There was also a news that RBI may be planning to bring a scheme in line of FCNR scheme they had launched in 2013 to mobilise dollars by which they had brought in $38 billion for a period of three years. That can bring the dollar rupee down as flows are the most important thing that will be required for the pair to come down,” said Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP.

 

A similar initiative, if rolled out, could help ease pressure on the rupee by boosting foreign currency inflows, a key determinant for the dollar-rupee trajectory at a time when portfolio flows remain uneven. Historically, such inflows have had a meaningful impact; the surge in dollar liquidity helped the rupee recover sharply from levels near 68 to around 58 against the greenback. 

Mkts rebound on political cues 

Sensex rebounded by 356 points, while the Nifty settled above 24,100 on Monday, as buying in blue-chip stocks and state poll results trending in line with market expectations lifted investor sentiment. 

The 30-share BSE Sensex climbed 355.90 points or 0.46 per cent to settle at 77,269.40. During the day, it jumped 997.25 points or 1.29 per cent to 77,910.75. 

The 50-share NSE Nifty rallied 121.75 points or 0.51 per cent to end at 24,119.30. From the 30-Sensex firms, Adani Ports, Hindustan Unilever, Reliance Industries, Larsen & Toubro, Eternal, and Maruti were among the biggest gainers. Bharti Airtel, Kotak Mahindra Bank, Tata Consultancy Services, and ITC were among the laggards from the pack. “Investor sentiment  supported by a favourable election outcome in West Bengal and a better-than-expected Q4 earnings, helping markets look past West Asia-related concerns. But, intermittent profit booking persisted amid uncertainty surrounding the  initiative to reopen the Strait of Hormuz,” Vinod Nair, Head of Research, Geojit Investments Limited, said.   (PTI)

NSE launches electronic gold receipts

  The National Stock Exchange (NSE) on Monday launched Electronic Gold Receipts (EGRs) as a new segment, in a bid to create a more transparent and efficient price discovery of the yellow metal. 

The move is expected to bridge the age-old gap between physical gold and the financial markets by offering a regulated, secure, and technologically-advanced platform for trading in the precious commodity, the exchange said in a statement.

EGRs are dematerialised securities representing ownership of physical gold, which is securely stored in Sebi-accredited vaults and held electronically through depositories. Each EGR is fully backed by physical gold and is tradable on the exchange, seamlessly integrating gold into the formal financial system. “NSE aims to create a robust and transparent ecosystem for gold trading, enabling efficient price discovery, improved market participation, and enhanced trust across stakeholders, including jewellers, refiners, traders, and institutional investors,” the exchange said. 

 

(PTI)