Rupee opens flat at 88.66 amid oil uptick; RBI intervention eyed

Indian Rupee today: The domestic currency opened flat at 88.66 against the greenback on Monday, according to Bloomberg

The Indian Rupee traded flat on Monday despite an increase in the dollar index and crude oil prices on reports that the US government shutdown is nearing an end. 

 

The domestic currency opened flat at 88.66 against the greenback on Monday, according to Bloomberg. The Rupee has risen 0.10 per cent this month, while it has fallen 3.6 per cent this year.

 

The rupee held steady on Friday, unable to breach the 88.73 mark despite a decline in equity markets, analysts noted. The currency traded within a narrow range of 88.50 to 88.80 through the week, with the Reserve Bank of India (RBI) continuing to defend the 88.80 level.

 

   

Foreign portfolio investors (FPIs) have sold equities worth ₹12,500 crore so far in November, keeping the US dollar well supported, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. While the dollar has remained stable, several Asian currencies, particularly the Korean won, have weakened, he said. 

 

The rupee is expected to trade within a narrow range of 88.55 to 88.80 during the day, with exporters likely to sell at the upper end and importers expected to buy on dips.

 

The RBI's defence of the 88.80 level has now become a visible line in the sand, keeping USD/INR capped, with strong resistance seen around 88.80-89.00 and support near 88.40, Amit Pabari, managing director at CR Forex Advisors, said. "This indicates a short-term consolidation within this range." 

 

However, backed by India’s solid economic fundamentals and improving investor sentiment, the medium-term bias remains tilted toward rupee strength, Pabari said. "A decisive break below 88.40 could pave the way for further gains toward 88.00-87.70 levels."

 

Market participants are awaiting key macroeconomic data releases both domestically and globally, even as the US government shutdown continues. The dollar index traded higher amid reports that US lawmakers are nearing a deal to end the longest shutdown. The measure of the greenback against a basket of six major currencies was up 0.06 per cent at 99.66. 

 

In commodities, crude oil prices traded higher amid cautious optimism supported by hopes that the US government shutdown may end soon. Brent crude price was up 0.74 per cent at 64.10 per barrel, while WTI crude prices were higher by 0.84 per cent at 60.24 per barrel, as of 9:00 AM IST.