INR Vs USD: Investors were treading the cautious path ahead of the RBI policy decision
The rupee lost 26 paise against the US dollar in early trade on Wednesday ahead of the outcome of the fifth bi-monthly policy review of Reserve Bank of India, reported news agency Press Trust of India (PTI). Losses in the rupee came amid fresh demand for the dollar. The rupee also came under pressure following a downtrend in domestic equity markets amid foreign fund outflows. On Tuesday, the rupee had settled at 70.49 against the dollar.
Here are 5 things that affected the rupee-dollar rate on Wednesday:
- Investors were treading the cautious path ahead of the RBI policy decision. A poll by news agency Reuters forecast that the monetary policy committee would hold its repo rate steady.
- Fresh demand for the American currency from importers weighed on the domestic unit, forex dealers were quoted as saying in the PTI report.
- The dollar index, which measures the greenback against a basket of six major currencies, edged up about 0.2 per cent, even though the US currency was under pressure as declining Treasury yields raised concerns over economic growth, reported Reuters.
- After foreign funds pulled out Rs 55.89 crore from the domestic equity markets on Tuesday, key benchmarks declined in trade on Wednesday. At 1:45 pm, the S&P BSE Sensex traded at 35,908.57, down 225.74 points or 0.62 per cent and the Nifty50 barometer of the National Stock Exchange (NSE) was at 10,793.45, with a loss of 76.05 points or 0.70 per cent.
- As a swelling supply glut and signs of an economic slowdown weighed on crude, prices declined a day ahead of a meeting of Organisation of the Petroleum Exporting Countries, at which the producer club is expected to decide supply cuts. International Brent crude oil futures were at $61.16 per barrel at 0757 GMT or 1:27 pm IST, down 92 cents, or 1.5 per cent, from their last close. (With agency inputs)
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