Bouts of dollar demand from importers put pressure on the rupee
The US currency's decline against major world currencies alongside fag-end dollar supply largely helped the rupee recoup some of its initial losses
Despite a heavy battering, the rupee on Tuesday made a smart recovery to close at 63.25 after hitting a fresh low of 64.13 against the US dollar, helped by RBI's massive intervention.
The country's foreign exchange reserves vaulted beyond $140 billion mark as inflows into the kitty swelled by $2.87 billion for the week ended March 11 due to heavy intervention in the market by Reserve Bank of India.
On the Sensex chart, Bajaj Finance, Bajaj FinServ, SBI, IndusInd Bank, Dr Reddy's, Tech Mahindra, ITC and Kotak Bank were the prominent gainers - rising up to 7.29 per cent. NSE Nifty climbed 102.40 points to end at 15,737.75.
Fresh dollar selling by exporters on hopes of fall in the USD after downward revision to that country's first quarter GDP growth also helped rupee recover as hopes surfaced that the Fed may delay the plan to taper of monetary stimulus.
IndusInd Bank was the top gainer in the Sensex pack, rallying over 7 per cent, followed by SBI, ICICI Bank, HDFC twins, Axis Bank, Bajaj Finserv and UltraTech Cement. NSE Nifty soared 245.35 points to 14,923.15.
Forex dealers said a higher opening in the domestic equity market and strengthening of euro against the dollar overseas also supported the rupee.
Axis Bank emerged as the biggest gainer in the Sensex pack, surging 6.62 per cent, followed by SBI at 5.88 per cent.
Raghuram Rajan said government would do everything to maintain stable and sustainable financing of CAD.
Indian stocks and the rupee have benefitted from dollar liquidity induced by the US Fed stimulus.
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 dollar index was down by 0.02 per cent against a basket of six major currencies.
'You can put 25 per cent right now; put another 25 per cent when Nifty corrects another 500 points.' 'At 13,500 put another 25 per cent and at 13,000 one can get fully deployed.'
As global economic risks continue and FII investments in the country becoming volatile, the rupee is likely to remain under pressure and hover around the 52-54 level against the US dollar in the next 10 days, forex market experts feel.
If mangoes become dearer or appreciate in price, we don't ask if the INR has appreciated or depreciated. We talk in terms of the value of mangoes, not INR. Likewise, in the forex market, we should now talk in terms of the value of dollars and not the INR, says Sonali Ranade
If mangoes become dearer or appreciate in price, we don't ask if the INR has appreciated or depreciated. We talk in terms of the value of mangoes, not INR. Likewise, in the forex market, we should now talk in terms of the value of dollars and not the INR, says Sonali Ranade
Forex dealers said euro's gain against the US dollar supported the rupee, but month-end dollar demand from oil importers and a weak opening in the equity market restricted the gains.
Forex dealers said euro's gains against the American currency in the overseas market also supported the rupee.
Erasing early gains, the rupee on Thursday closed six paise lower at 53.22 due to sustained dollar demand after government estimates pegged ongoing fiscal's GDP growth at a decade low of five per cent.
Forex dealers said besides robust month-end demand for the American currency from oil importers, dollar's strength against its rival currencies on expectations of rising interest rates amid lingering Sino-US trade tensions, weighed on the domestic currency.
The rupee resumed higher at 53.26 per dollar.
This is the second biggest rise since September 21 last year, when rupee had gained by 93 paise, or 1.71 per cent.
The fall in total reserves was mainly because of a decline in foreign currency assets worth $4.5 billion, the data showed.
The rupee ended lower by six paise at 65.73 against the US dollar on Monday.
An Enforcement Directorate (ED) investigation into alleged foreign exchange law violations by edtech major Byju's and its CEO and co-founder Raveendran Bjyu is in the final stages of completion following which a show cause notice could be served to them, official sources said Tuesday. The central probe agency had in April searched two business and one residential premises, including that of the registered company of Byju's -- Think & Learn Pvt. Ltd. -- under the provisions of the Foreign Exchange Management Act (FEMA).
The local currency lost some of the gains after the forex market realised that RBI's decision would result in only up to $3 billion extra dollar supply in the market in initial stages.
Dealers said firm local equities amid sustained capital inflows limited the rupee's fall.
The big test will come at the end of March when the fiscal year ends and banks tend to hold on to cash.
The rupee had lost 52 paise to close at 54.08 against the dollar on Tuesday on heavy month-end dollar demand from importers and corporates.
Forex dealer said increased demand for the American currency from oil importers and dollar's gains against other currencies overseas mainly put pressure on the local unit.
The rupee also recouped against the pound sterling to end at 85.01 from overnight close of 85.15 and also rebounded against the Japanese yen to 67.04 per 100 yen from 67.38.
It touched a low of 53.16 on continued dollar demand from importers and some weakness in stocks in the initial stage.
Forex experts said the dollar index, a gauge of six major global rivals, was marginally up ahead of US non-farm payroll data later in the evening while New York crude oil was quoting below USD 91 a barrel in Europe today.
Noting that Indian firms face a high risk of mark-to-market losses due to a volatile forex market, a brokerage firm has named telecom major Reliance Communications and auto giant Tata Motors among five blue-chip companies estimated to have suffered the most during 2008-09.
The rupee had lost 8 paise to end at 55.44 against the dollar in Monday's session on fresh dollar demand from importers.
Axis Bank was the top laggard in the Sensex pack, shedding over 3 per cent, followed by SBI, ICICI Bank, ONGC, HDFC and Kotak Bank.
The US dollar index was up by 0.16 per cent at 96.53.
Jet fuel prices on Monday were hiked by a steep 5.3 per cent - the tenth straight increase this year -- to an all-time high, in line with a surge in global energy prices. The price of aviation turbine fuel (ATF) -- the fuel that helps aeroplanes fly -- was hiked by Rs 6,188.25 per kilolitre, or 5.29 per cent, to Rs 1,23,039.71 per kl (Rs 123 per litre) in the national capital, according to a price notification of state-owned fuel retailers. This is the 10th straight increase in jet fuel prices this year.
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