Rupee pulls back from record low levels on softer oil; opens at 88.71/$

Indian Rupee today: The domestic currency opened 3 paise higher at 88.71 against the greenback on Monday

The Indian rupee eased from near-record lows after three consecutive sessions of decline, supported by softer oil prices even as the dollar remained firm.

 

The domestic currency opened 3 paise higher at 88.71 against the greenback on Monday, according to Bloomberg. The Rupee has risen 0.06 per cent this month, while it has fallen 3.63 per cent this year, amongst the worst-performing Asian currencies. 

 

The US-India trade deal saw a minor development as US President Donald Trump relaxed duties on tea, spices and nearly 200 food and agricultural items to curb domestic inflation, which had risen to 15 per cent. This move is expected to offer a modest boost to Indian agricultural exports, with an estimated $2-3 billion in benefits, analysts said. 

 

 

The rupee remains under pressure, having closed at 88.74 on Friday and is expected to open slightly stronger at 88.69 this morning, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. Foreign portfolio investors continued to sell local equities, withdrawing ₹5,000 crore on Friday and taking total November outflows past ₹14,000 crore, he said. 

 

The Reserve Bank of India’s (RBI) defence of the currency has turned more aggressive as the rupee stays undervalued even as speculators attempt to push it towards 89.00, Bhansali said. India's foreign exchange reserves dropped by another $2.69 billion to $687.03 billion during the week ended November 7. The forex kitty has been on a declining trend for the past few weeks, and has decreased by $5.62 billion to $689.73 billion in the previous reporting week.

 

The rupee is expected to remain range-bound with levels seen between 88.45-88.95, according to Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

 

The dollar index was trading stronger as traders await a backlog of key US economic data, which was delayed due to the recent government shutdown. The measure of the greenback against a basket of six major currencies was up 0.14 per cent at 99.43.

 

In commodities, crude oil prices traded lower amid supply concerns, with US crude inventories rising for two consecutive weeks. Brent crude price was down 0.85 per cent at 63.81 per barrel, while WTI crude prices were lower by 1.02 per cent at 59.50 per barrel, as of 8:50 AM IST.