Alright, let’s break it down. The rupee strengthened against the US dollar by 2 paise, reaching 83.35 in early trade on Wednesday. This was influenced by a positive trend in the Indian stock market and continuous foreign investments. Investors were cautious ahead of the Reserve Bank of India’s (RBI) upcoming monetary policy decision later in the week.
On the foreign exchange front, the rupee started 2 paise higher at 83.35 against the dollar, coinciding with new all-time highs in domestic benchmark indices. The previous day, the rupee had settled at 83.37 against the dollar. Market experts, like CR Forex Advisors MD Amit Pabari, highlighted the significance of monitoring the RBI’s policy decisions, which were set to be disclosed on Friday following a three-day deliberation by the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das.
Expectations were that the RBI would likely maintain the current short-term interest rates during its policy review. The dollar index, indicating the strength of the US dollar against a basket of six currencies, was down 0.11% at 103.93. Simultaneously, Brent crude futures, the global oil benchmark, rose by 0.12% to USD 77.29 per barrel.
Shifting focus to the domestic stock market, the 30-share BSE Sensex was up by 269.23 points (0.39%) at 69,565.25 points, and the broader NSE Nifty recorded a gain of 79.50 points (0.38%) to reach 20,934.60 points. Foreign Institutional Investors (FIIs) were active net buyers in the capital markets on Tuesday, purchasing shares worth Rs 5,223.51 crore, as reported by exchange data.
In summary, the rupee’s movement was influenced by positive factors in the domestic equities and foreign fund inflows, with a watchful eye on the upcoming RBI monetary policy decision. Other global factors, such as the dollar index and crude oil prices, also played a role in shaping the market dynamics.
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