The Reserve Bank on Thursday said it has put in place contingency plans to infuse liquidity into the system to deal with any possible volatility in markets on Friday in view of the election results.
In Delhi, gold of 99.9 and 99.5 per cent purity zoomed up by Rs 650 each to Rs 27,470 and Rs 27,270 per 10 grams respectively.
In forward market, premium for dollar declined in view of mild receivings from exporters.
The 50-stock NSE barometer Nifty finished 14.75 points, or 0.14 per cent, down at 10,382.70 after shuttling between 10,340.65 and 10,393.15.
The union government is expected to cut two per cent import duty in gold in the forthcoming budget, as local jewellers run out of inventory, a leading US brokerage said.
The rupee snapped its two-day winning run against the dollar.
In dull trade, the rupee on Monday ended a mere two paise lower at 60.20 against the US dollar on weak local equities and imported-driven demand for the American currency.
The RBI fixed the reference rate for the dollar at 65.2525 and for the euro at 72.1954.
gold prices fell by Rs 210 to Rs 26,600 per 10 grams.
As the Indian currency hovers around its lowest versus the US greenback, several smaller and mid-sized companies are expected to face rough weather as almost 44 per cent of the foreign loans taken by Indian companies remained unhedged. According to the data sourced from the Reserve Bank of India, Indian companies raised around $38.2 billion in the financial year ended in March. Of this, only 56 per cent of the loans are hedged while the rest of the foreign loans remain unhedged, thus risking the companies to forex volatility.
Fresh demand for the US currency from importers and banks alongside sustained capital outflows by foreign funds weighed on the local unit
Silver also fell for the third day.
The rupee extended its losses and slumped 10 paise to close at a record low of 77.72 (provisional) against the US dollar on Thursday, weighed down by a negative trend in domestic equities and unabated foreign fund outflows. At the interbank foreign exchange market, the rupee opened lower at 77.72 against the greenback, and finally settled for the day at 77.72, down 10 paise over its previous close. During the trading session, the rupee touched an intra-day low of 77.76 and a high of 77.63.
Silver also recorded a sharp fall of Rs 1,000 to Rs 37,400 per kg.
A lower opening at the domestic equity market and the dollar's rise against other major currencies overseas also put pressure on the rupee, dealers said.
Ongoing trade-war rhetoric between the US and China added some nervousness on the trading front coupled with extremely bullish dollar sentiment overseas.
Sustained capital inflows supporting the rupee sentiment, a forex dealer said.
The Indian rupee is expected to trade between 80 and 84 against dollar in the first three months of 2023 with support from overseas inflows though worsening current account deficit (CAD) and reduced interest rate differential between the US and India pose challenges. According to a Business Standard Poll of 10 participants, most said the rupee could gain strength in January due to foreign inflows, and the Reserve Bank of India (RBI) is not expected to allow the currency to depreciate ahead of the Union Budget scheduled on February 1. The rupee depreciated 10.15 per cent in 2022, its worst performance since 2013 as the war in Europe and the interest rate increase by the US Federal Reserve prompted investors to flee emerging markets.
The Indian rupee resumed sharply lower at 66.65 per dollar against last Friday's level of 66.48.
Dollar weakness was a major contributor to the rupee recovery as the skittish investors continued to lighten their long positions.
Consistent capital inflows and a recovery in local equities helped the local unit to trim initial losses
The rupee continued to rule firm against the dollar for the second consecutive day.
Lower crude oil prices and a rally in domestic equities restricted the losses to some extent, forex dealers said. At the interbank foreign exchange market, the domestic currency opened weak at 79.50 per dollar.
Reserve Bank Governor Shaktikanta Das on Wednesday said in the wake of appreciating US dollar, the movement of rupee has remained least disruptive as compared to its peers, and the size of foreign exchange reserve is comfortable. On a financial year basis (from April to October 2022), the rupee has appreciated by 3.2 per cent in real terms, even as several major currencies have depreciated, he said while announcing the latest set of bi-monthly monetary policy. "The story of the rupee has been one of India's resilience and stability," the Governor said while pointing out that the appreciation of the US dollar this year, which precipitated large-scale depreciation of all major global currencies including the Indian rupee, has drawn wide attention.
The rupee has lost 37 paise or 0.55 per cent in two days.
Weak equity markets too hit rupee sentiment
Weakness of dollar in the overseas market also boosted the rupee value.
A weak dollar in overseas markets also strengthened the rupee sentiment
The RBI recently met with a handful of foreign banks and asked them to stop acting as market-makers for rupee NDFs, according to three bankers involved in the discussions.
Tracking a steep fall in local share market, the Indian rupee on Tuesday washed out initial gains and ended with a loss of 16 paise
Foreign fund inflows and a higher opening in the domestic equity market supported the domestic unit
The rupee ended marginally higher by two paise at 62.24 against the dollar on Wednesday.
In the forward market, the premium for dollar moved up on fresh paying pressure corporates.
The rupee recovered from initial losses against the US dollar and was quoted barely steady at 61.91 on selling of the American currency by banks and exporters on good foreign capital inflows.
A weak dollar overseas supported the rupee sentiment.
Officials said Sebi is closely in touch with RBI on the market developments.
The rupee on Tuesday gained 29 paise to close at seven-month high of 60.48 against the dollar on sustained selling of the US currency by exporters and banks.
The Reserve Bank of India's (RBI's) outstanding net forward purchases of US dollars fell by more than 50 per cent from the last quarter of FY22 to $30.86 billion in the June quarter (Q1). The net forwards position was at $65.79 billion at the end of the last fiscal year. The purchases fell by $18.33 billion in June as the central bank intervened in both the forwards and the spot market in order to protect the rupee from excessive depreciation in the face of a widening trade deficit.
Dealers attributed the rupee's fall to increased demand for the US currency from importers.
The rupee recovered from initial losses against the American currency and was quoted higher by 6 paise to 62.00 on fresh selling of dollars by banks and exporters in view of strong foreign capital inflows into equity market.
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