As COVID-19 infections spike in the country resulting in restrictions in various states and impacting the fragile recovery, many economists are expecting RBI to delay the policy normalisation move, which is expected in the February review. The country has reported a single-day rise of 58,097 new Covid-19 cases as of Wednesday morning--the highest in around 199 days -- of which 2,135 are Omicron cases and later in the day, the first confirmed Omicron-related death has also been reported. Maharashtra recorded the maximum number of 653 Omicron cases followed by Delhi at 464, Kerala 185, Rajasthan 174, Gujarat 154 and Tamil Nadu 121 cases, taking the total tally of cases to 3,50,18,358.
Investment consulting firm Millwood Kane International said on Tuesday that investments in gold gave gains of nearly 28 per cent in rupee terms during 2020 and will remain in focus for investors in the coming year. "The yellow metal has had a phenomenal year with gains of nearly 28 per cent in rupee terms. "After a double-digit gain in 2019, this will be the second year in a row that gold will be posting a stellar rise," said founder and CEO Nish Bhatt.
Continued demand for the American unit from importers and the greenback's persistent gains against other Asian currencies put pressure on the rupee
Dealers attributed the rupee's fall to increased demand.
Unwinding of long-dollar positions by speculative traders and the currency's strong underlying fundamentals buoyed the home unit
However, the US dollar's strength against other currencies overseas capped the rupee's gain
Covid-19, US yields, dollar to weigh on equity flows in the near term.
The US Fed kept its near-zero benchmark interest rate unchanged.
M&M was the top gainer in the Sensex pack, soaring around 7 per cent, followed by Bajaj Finserv, Bharti Airtel, PowerGrid, Infosys and ICICI Bank. On the other hand, HUL, Kotak Bank, Bajaj Finance and ITC were among the laggards.
Bearish greenback overseas and robust capital inflows predominantly supported the domestic currency
The US dollar index, which measures greenback's strength against a trade-weighted basket of six major currencies, was up 0.14 per cent at 96.74.
Forex traders said a stronger dollar also dragged the rupee down.
SBI managing director PK Gupta told reporters that the rupee has been faring better than many of its peers, including the Turkish, Argentinean, and Indonesian currencies.
On Tuesday, the rupee lost 9 paise to close at 66.67 against the US dollar.
'You should always maintain an allocation to gold as it has the ability to counterbalance any correction in the equity market.'
In New York market, the dollar continued to weaken against its rivals yesterday on a day devoid of major data releases out of Europe and the US.
The dollar firmed up against some global currencies.
The value of the gold reserves increased $78.2 million to $22.764 billion
The rupee had gained 2 paise to close at 67.37 on Friday.
The rupee lost 8 paise to close at 66.52 against the US dollar on Thursday.
The rupee closed almost flat at 65.76 against the US dollar on some demand for the American currency from banks.
Foreign fund outflows and a lower opening in the domestic equity market, restricted rupee's gain.
The rupee ended lower by six paise at 65.73 against the US dollar on Monday.
The reserves had touched a life-time high of $426.028 billion in the week to April 13, 2018.
The domestic currency had lost 15 paise to close at 63.82 on Wednesday.
The Reserve Bank of India (RBI) is precariously balancing two opposing objectives - maintaining easy financial condition in the domestic market, while ensuring external stability - and economists have started taking note. They say India is going through the classic trilemma of the 'Impossible Trinity'. The RBI cannot have an independent monetary policy (setting domestic interest rates) in an environment of an open capital account and flexible exchange rates. What is even more complicated for the central bank now is that financial market stability overlays all the other three objectives.
There was fresh dollar demand from banks and importers.
The rupee has declined by 24 paise in four days of losses.
Dollar's strength against some currencies overseas capped the gains
Forex dealers said a higher opening in the domestic equity market also supported the rupee.
Sale of dollars directly by the RBI can help but only temporarily for a day or two before it will be back to a volatile market.
The local currency had gained 7 paise to close at 66.57 in Monday's trade.
The US dollar surged to fresh one-year high after the Fed chief's testimony to the US Senate on Wednesday bolstered the expectations of interest rate hikes, though gradually.
The rupee had dropped by 6 paise to close at 66.65 in Thursday's trade.
The Indian currency on September 10 rose 141 paise
The Indian rupee continued its downward march and fell by another 48 paise to 46.53 against the US dollar in early trade on Tuesday owing to melting Asian stock markets amid heavy demand for the greenback.
The US dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was sharply higher by 0.62 per cent at 93.96.
The rupee on Friday closed 10 paise higher at 65 against the US dollar on fresh selling of greenback by banks.
The rupee had plunged by 19 paise to close at over 3-week low.
At the Interbank Foreign Exchange market, the domestic unit commenced higher at 61.80 a dollar from previous close of 61.92.
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