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India Rupee Review: Persistent RBI dlr sales avert fall below 80/$1

Informist, Wednesday, Jul 20, 2022

 

By Pratiksha and Srijonee Bhattacharjee

 

NEW DELHI – Despite persistent dollar purchases by oil companies and other importers, the rupee ended a paisa short of the 80-per-dollar mark today, on account of continuous dollar sales by the Reserve Bank of India, dealers said. 

 

After moving in a narrow range of 8 paise through the day, the rupee ended at a record closing low of 79.9900 a dollar as against 79.9400 a dollar at previous close.

 

Today, the rupee opened flat at 79.9400 a dollar. However, shortly afterwards, it fell to 79.9800 a dollar as some banks purchased dollars on behalf of importers, dealers said.

 

However, losses in the rupee were restricted as some state-owned banks stepped in to sell dollars, likely on behalf of the RBI, who wanted to prevent the rupee from falling below the psychologically-crucial 80-a-dollar level, dealers said.

 

This led exporters to believe that the central bank may not allow the domestic currency to fall below the psychologically-crucial level so soon, dealers said. 

 

“The RBI as expected protected the 80 (a dollar) level,” a dealer with a private bank said. “Exporters are also coming in at these levels, since they’ve been on the sidelines for very long now. They are expecting the 80 level to be held for some time.”

 

However, the rupee was weighed down by dollar purchases by oil and other importers throughout the day, dealers said. 

 

“The demand (of dollars) in the market is such that even though the dollar is weakening and equities were up today, the rupee barely saw any upward movement,” a dealer with a state-owned bank said.

 

Prices of crude oil fell today ahead of the release of the US crude inventories data, which is expected to remain high as fuel demand weakens.

 

At 1653 IST, the September contract of Brent crude oil on the Intercontinental Exchange was at $105.56 a barrel as against the previous close of $106.27 a bbl. 

 

Meanwhile, the dollar index fell as the euro strengthened after media reports said that the European Central Bank is considering raising interest rates by bigger-than-expected 50 basis points at their meeting on Thursday, to tame record-high inflation. This provided support to the Indian currency, dealers said.

 

At 1653 IST, the dollar index, which measures strength in the US currency against a basket of six major currencies, was at 106.87 compared with 106.68 on Tuesday. It was at 107.37 on Monday.

 

Rise in domestic equities also supported the Indian unit, dealers said. The Nifty 50 and the Sensex ended 1.1% and 1.2% higher, respectively.

 

Today, the rupee traded at 79.92-79.98 a dollar for most of the session. 

 

However, as importers stepped up dollar purchases, the rupee fell to the day’s low of 79.9925 a dollar, and went on to close at 79.9900 a dollar. 

 

Earlier today, Informist reported, quoting a banking industry source, that the RBI is actively intervening to address any jerky movements in the foreign exchange market and ensure that it functions normally, rather than target a specific level of the rupee against the dollar.

 

 

AT 1530 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.990079.940079.917579.992579.9400

 

FORWARDS

Premiums on dollar/rupee forwards fell slightly because some exporters sold dollars for forward delivery noting the rupee’s fall in the spot market, dealers said. 

 

The premium on the one-year dollar/rupee contract was 254.00 paise, against 255.00 paise on Tuesday. The premium fell from an intraday high of 257.20 paise. On an annualised basis, the premium was at 3.16% against the previous close of 3.19%.

 

Dealers said that support from the RBI’s dollar sales prevented a fall in the Indian unit below to 80 a dollar and this led exporters to believe that the central bank may not allow the domestic currency to fall below the psychologically-crucial level so soon.

 

The dollar/rupee exchange rate is a component of the premium that the exporter receives on selling dollars for forward delivery. A rise in the dollar/rupee exchange rate (a fall in the rupee) makes the premium more attractive for exporters.

 

OUTLOOK

On Thursday, the rupee will take cues from overnight movement in the dollar index and Brent crude oil prices, dealers said.

 

“What needs to be seen now is how long the RBI will sustain the above 80 levels, since further market sentiment very much relies on that,” a dealer with a state-owned bank said.

 

Investors are now awaiting data on crude and fuel inventories from the US Energy Information Administration later today. 

 

Dealers expect that the RBI will continue to intervene through dollar sales to protect the rupee from depreciating beyond the psychologically-crucial 80-per-dollar mark. They see immediate key technical support for the rupee at 80.00 a dollar and the long term support at 80.50 a dollar.

 

During the day, the rupee is seen at 79.70-80.20 a dollar.

 India Rupee – World FX: Euro firm ahead of ECB policy meet Thu

 

 AT 1606 ISTHIGHLOWPREVIOUSGBP/USD 1.19841.20371.19841.1999EUR/USD 1.02061.02731.02061.0228NZD/USD 0.62480.62720.62240.6224AUD/USD 0.69100.69300.68930.6898USD/JPY 138.1620138.3760137.9060138.1740USD/CAD 1.28761.28821.28551.2871EUR/JPY 141.0000141.9290140.9970141.3280CHF/USD 1.03011.03341.03001.0319EUR/CHF 0.99050.99450.99060.9904

 

MUMBAI – The euro remained firm against the US dollar ahead of the European Central Bank’s monetary policy meet on Thursday, when it is expected to raise interest rates by 50 basis points to curb the record-high inflation.

 

The common-bloc currency gained over 1.5% this week after reports said that central bank policymakers may prefer a 50-bps rate hike on Thursday instead of the earlier expected 25-bps hike .

 

The report also said the ECB will announce its anti-fragmentation tool, designed to support vulnerable government bond markets.

 

The euro was also supported by reports that said that Russian gas flows to Europe through the Nord Stream 1 pipeline were set to restart on time, which allayed some concern about energy supply crunch. (Richard Fargose)

India Rupee: Premia a tad down as a few exporters sell fwd dollars

 

 

AT 1420 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.965079.9400

 

 

79.9175

 

 

79.9800

79.9400

 

1-year dlr/rupee fwd (paise)253.00255.50257.20 253.00255.00

 

MUMBAI – Premiums on dollar/rupee forwards fell slightly because some exporters sold dollars for forward delivery noting the rupee’s fall in the spot market, dealers said. 

 

The premium on the one-year dollar/rupee contract was 253.00 paise, against 255.00 paise on Tuesday. The premium fell from an intraday high of 257.20 paise. On an annualised basis, the premium was at 3.15% against the previous close of 3.19%.

 

Dealers said that support from the Reserve Bank of India’s dollar sales prevented a fall in the Indian unit below 80 a dollar and this led exporters to believe that the central bank may not allow the domestic currency to fall below the psychologically-crucial level so soon. 

 

The dollar/rupee exchange rate is a component of the premium that the exporter receives on selling dollars for forward delivery. A rise in the dollar/rupee exchange rate (a fall in the rupee) makes the premium more attractive for exporters.  (Srijonee Bhattacharjee) 

India Rupee: Remains in tight range in absence of significant cues

 

 

AT 1330 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.960079.940079.917579.980079.9400

 

NEW DELHI – The rupee remained in a narrow range against the dollar today as traders stayed on the sidelines and avoided placing fresh bets due to lack of significant cues, dealers said. 

 

The Indian currency has moved within a range of 7 paise so far today.

 

Earlier today, the rupee touched the day’s low of 79.9800 a dollar as some banks purchased the greenback on behalf of importers, dealers said. 

 

Dealers have pegged immediate technical support for the rupee at 80.00 a dollar.

 

Earlier today, Informist had reported, quoting a banking industry source, that the Reserve Bank of India is actively intervening to address any jerky movements in the foreign exchange market and ensure that it functions normally, rather than target a specific level of the rupee against the dollar.

 

For the rest of the day, the Indian currency is seen at 79.8000-80.1000 a dollar.  (Pratiksha)

 

India Rupee – Asia FX: Most up as equities gain, dlr index falls

 

NEW DELHI – Most Asian currencies were up against the greenback today tracking gains in local equity markets.

 

Asian equities rose as a slew of positive earnings in the US boosted investor sentiment.

 

Reports that Russian gas flows to Europe through the Nord Stream-1 pipeline are set to restart on time allayed some concerns about an energy supply crunch in Europe and lifted the risk sentiment globally.

 

Owing to the improved risk sentiment, the US dollar fell as safe-haven demand for the greenback waned.

 

At 0958 IST, the dollar index was at 106.52 compared with 106.68 on Tuesday. It was at 107.37 on Monday.

 

The South Korean won rose 0.4% against the greenback, the most among its Asian peers. (Richard Fargose)

India Rupee: Steady as dlr buys by importers offset gains on weak dlr

 

Informist, Wednesday, Jul 20, 2022

 

 

AT 0945 IST

AT 0900 IST

HIGH

LOW

PREVIOUS

(AT 1530 IST)

Spot rupee per $1

79.940079.940079.917579.955079.9400

 

NEW DELHI – The rupee was largely steady against the greenback today as dollar purchases by importers offset gains due to weakness in the US dollar index, dealers said. 

 

Shortly after opening, the Indian currency rose to the 79.9175 a dollar level as the dollar index weakened due to a rise in the euro after media reports said that the European Central Bank is considering raising interest rates by a bigger-than-expected 50 basis points at their meeting on Thursday to tame record-high inflation.

 

At 0945 IST, the dollar index, which measures the strength in the US currency against a basket of six major currencies, was at 106.55 compared with 106.68 on Tuesday. It was at 107.37 on Monday.

 

However, dealers said importers were covering their near-term dollar needs on every dip in dollar/rupee levels, due to which the rupee pared gains and was trading almost flat. 

 

A rise in domestic and Asian share indices also supported the sentiment for the Indian unit, dealers said. At 0945 IST, both the Nifty 50 and the Sensex were up 1.2% each.

 

“Importers are buying (dollars) a lot at these levels, so even if the dollar has weakened and equities are positive, the rupee is not able to get support from these factors,” a dealer with a state-owned bank said. 

 

Dealers have pegged the immediate technical support for the rupee at 80.00 a dollar.

 

For the rest of the day, the Indian unit is seen moving in the range of 79.8000-80.1000 a dollar.  (Pratiksha)

India Rupee: Expected range for rupee – Jul 20

 

NEW DELHI – Following are the expected support and resistance levels for the rupee, as forecasted by leading banks and brokerages in an Informist poll:

 

Participants

SUPPORT

RESISTANCE

Big state-owned bank80.0079.70State-owned bank80.1079.80State-owned bank80.0579.75Foreign bank80.1579.70Private bank80.1079.80Brokerage firm79.9879.68Brokerage firm80.0579.80

(Pratiksha and Richard Fargose)

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Aditya Sakorkar

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to [email protected]

 

© Informist Media Pvt. Ltd. 2022. All rights reserved.

Source: Cogencis

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