Rupee Declines For 7th Straight Session, Settles Lower To 73.32 Against Dollar

The rupee depreciated for the seventh straight session, edging lower by one paisa against the US dollar on Wednesday, June 16, to settle at 73.32 (provisional) ahead of the US Federal Reserve meeting and muted domestic equities. At the interbank foreign exchange market, the local unit opened at 73.29 against the dollar and swung in the range of 73.26 to 73.38 during the day. In an early trade session, the domestic currency rose four paise to 73.27 against the greenback. The local unit has lost 52 paise in the seven trading sessions to Wednesday. 

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.04 per cent to 90.50.

''The rupee depreciated for a 7th consecutive session against the U.S. dollar, as Asian currencies were stable while oil fell a bit and the market was awaiting the outcome of the all-important FED meeting tonight. Though, the rupee closed at 73.32 it had fallen to the extent of 73.38 before recovering,'' said Mr. Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.

''The rupee may remain under pressure in the near term as oil prices rise but depreciation should be in control as RBI has sufficient reserves to manage the same,'' added Mr Bhansali.

''Soaring oil prices amid demand outlook optimism and the fading prospect of Iranian oil returning to the market, led oil importers to rush to cover their USDINR positions ahead of today's Fed meeting. So far, the rupee had been supported by the inflows pertaining to IPO's that flowed until yesterday. If inflows get standstill, we might see the rupee tilting on the depreciation side in the upcoming time,'' said Mr Amit Pabari, MD, CR Forex.

On the domestic equity market front, the BSE Sensex ended 271.07 points or 0.51 per cent lower at 52,501.98, while the broader NSE Nifty declined 101.70 points or 0.64 per cent to 15,767.55.

“The market remained in a narrow trading range with a negative bias ahead of the Fed's meeting in the US. Today, we also saw a big drag on the metal index due to a specific announcement from China on the increase of supply in commodities....As the major trend of the market is positive, our advice is to add long positions, if the market falls to major supports in the short term,'' said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

According to the exchange data, the foreign institutional investors were net buyers in the capital market on June 15 as they purchased shares worth Rs 633.69 crore. Brent crude futures, the global oil benchmark, rose 0.27 per cent to $ 74.19 per barrel.