Rupee vs dollar: Analysts will watch the outcome of the RBI's sixth bi-monthly policy closely
The rupee edged higher against the dollar in morning trade on Wednesday. The rupee appreciated by eight paise against the greenback to hit 71.49, compared with its previous close of 71.57. Strength in the domestic equity markets, with the Nifty crossing the 11,000 mark for the first time in more than four months, boosted the rupee. However, rising crude oil prices limited the upside. The mild gain in the rupee comes a day after it closed 23 paise higher to break a two-day fall.
Here are 10 things to know about rupee:
- The rupee opened at 71.56 on Wednesday and moved in a range of 71.49-71.60 amid volatile trade.
- Analysts will watch the outcome of the Reserve Bank of India's sixth bi-monthly policy for the current financial year due on Thursday.
- The rupee is likely to be range-bound between 71.40 and 71.80 ahead of the monetary policy announcement, according to forex advisory firm IFA Global. "The US dollar has strengthened across the board. The overall risk sentiment is positive," it noted.
- Crude oil prices edged higher but concerns over the outlook for the global economy capped gains. Brent futures, the international benchmark for crude oil, were last seen up 0.1 per cent at $62.05 per barrel, after closing down 0.8 per cent in the previous session.
- "Rupee is expected to come under pressure as crude oil prices are rising gradually. Market is nervous on fear of fiscal slippages due to series of welfare schemes announced in the budget. Focus will now shift to the RBI monetary policy meeting," said Rushabh Maru, research analyst at Anand Rathi Shares and Stock Brokers. "Overall the rupee is expected to trade in a range of 71.00-72.00 in the short term with currency maintaining depreciation trend," he said.
- According to a poll of over 55 forex strategists, the rupee will strengthen only slightly to 71.0 per dollar in a year, news agency Reuters reported.
- The rupee is set to underperform against the dollar again this year, weighed down by uncertainty ahead of a national election in May, but is unlikely to retest life-time lows, the Reuters poll showed.
- After reversing some of the deep losses in the final few months of 2018, the rupee has lost about 3 per cent so far this year. That includes a nearly 1 per cent rise since the government announced its interim budget on February 1.
- Thursday's monetary policy statement by the central bank will mark the first under governor Shaktikanta Das.
- Meanwhile, foreign funds purchased shares worth Rs 420.65 crore on a net basis on Tuesday, while net purchases by domestic institutional investors (DIIs) stood at Rs 194.31 crore, provisional data from the NSE showed.
(With agency inputs)
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