Rupee Slumps 12 Paise Lower Against Dollar, Closes At 73.93

The rupee edged lower by 12 paise against the US dollar on Thursday, December 3, settling at 73.93 (provisional) as investors remained cautious ahead of the Reserve Bank of India's (RBI) policy meet outcome. At the interbank foreign exchange market, the local unit registered a highly volatile trading session. The rupee opened at 73.81 and witnessed an intra-day high of 73.68. It registered a low of 73.95. In an early trade session, the rupee slipped by eight paise to 73.89 against the American currency. It settled at 73.93 a dollar, for the day, with a decline of 12 paise. On Wednesday, the local unit slumped by 13 paise against the dollar and closed at 73.81.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.12 per cent to 91.00. According to analysts, the investor focus is on the Reserve Bank of India's Monetary Policy Committee's three-day interest rate-setting meeting that started on Wednesday, December 2, with the decision due on Friday. According to provisional exchange data, the foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 357.35 crore on a net basis on December 2.

"The rupee depreciated despite weakness in dollar and rise in risk appetite in the global markets as investors remained cautious ahead of the RBI monetary policy meeting outcome," said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

He added that market sentiments improved on promising reports on efficacy of COVID-19 vaccine and on hopes for more fiscal stimulus from the US government. Additionally, the UK granted emergency use authorization for COVID-19 vaccine developed by Pfizer Inc and BioNTech.

On the domestic equity market front, the BSE Sensex ended at 14.61 points or 0.03 per cent higher at 44,632.65, while the NSE Nifty climbed 20.15 points or 0.15 per cent to 13,133.90.

''After opening at a new all-time high of 13,216, Nifty is hovering around the 13,140 mark. Nifty's rally was backed by high FPI inflows, positive news on the vaccine front and increasing retail investor participation. Global equities were positive after Britain announced it became the first country to approve the Pfizer-BioNTech vaccine against COVID-19. Also, hopes for US stimulus are keeping the market sentiments intact, '' said Gaurav Garg, Head of Research, CapitalVia Global Research Limited. 

Brent crude futures, the global oil benchmark, fell 0.33 per cent to USD 48.09 per barrel.