Registering losses for the fifth straight session, the rupee depreciated 15 paise against the US dollar on Friday, April 9, to settle at 74.73 (provisional) amid rising COVID-19 cases, subdued domestic equities, and a stronger American currency. At the interbank foreign exchange market, the domestic unit opened at 74.75 against the dollar and traded between 74.53 to 74.96 during the session. In an early trade session, the local unit declined 17 paise to 74.75 against the greenback. It ended at 74.73 against the dollar, registering a fall of 15 paise over its previous close. On Thursday, the rupee had settled at 74.58 against the American currency.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six peers, climbed 0.25 per cent to 92.29. It was the fifth straight session of loss for the local unit, during which it has registered a decline of 161 paise. On Thursday, the local unit settled 11 paise lower to 74.58 against the dollar. On Wednesday, April 7, when the Reserve Bank of India (RBI) announced its first bi-monthly monetary policy committee (MPC) statement for fiscal 2021-22, the rupee registered a massive decline of 105 paise to close at 74.47 against the greenback. On Tuesday, the rupee closed lower to 73.42 against the dollar.
''Rupee opened weaker at 74.77 but was immediately bought and is currently at 73.70 but the market is very dollar biddish. So any dips to 74.40/50 is to be bought while any uptick to 74.95 can be sold. Good time for exporters to hedge but if they want to capture the upmove then they should keep a stop loss at 74.25 or buy 74.25 puts. Importers for cash can hedge near 74.50/40. For longer-term they have to wait,'' said Anil Kumar Bhansali, Head- Treasury, Finrex Treasury Advisors.
“The week has been very volatile and rupee has depreciated nearly 2.5 per cent on unprecedented bond buying plan by the RBI. Had the movement been dollar index driven, we wouldn't have seen such a sharp depreciation in the rupee. Next week is a truncated week with two currency holidays, so we can expect the optimism over dovish Fed to limit the fall in rupee with focus on India's CPI data and impact of Covid's second wave,'' said Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services.
On the domestic equity market front, the BSE Sensex ended 154.89 points or 0.31 per cent lower at 49,591.32, while the broader NSE Nifty slipped by 38.95 points or 0.26 per cent to 14,834.85.
''The Nifty 50 index closed 39 points lower, the blue-chip Sensex 30 index was down by 155 points. The Bank Nifty closed at the lowest point of the last eight weeks. The bank Nifty was at 37700 in the middle of February and it closed at 32450 levels. In the current week, Nifty Pharmaceuticals and Nifty Metal index did extraordinarily well and gained more than five per cent on a closing basis,'' said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
''During the week, FIIs turned net seller for 1700 crores in the cash segment. The dollar index came off from the highs but the Indian rupee also depreciated to the lowest levels of the last five months at 74.75 that could minimize inflows for our markets if the downward trend persists,'' he added.
According to exchange data, the foreign institutional investors were net buyers in the capital market and purchased shares worth 110.85 crore on April 8. Brent crude futures, the global oil benchmark, was trading 0.30 per cent down at $ 63.01 per barrel.