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India Rupee Review: Recoups losses as banks sell dlrs likely for RBI

Informist, Wednesday, Dec 28, 2022

 

By Kabir Sharma

 

MUMBAI – The rupee ended flat today, after falling to a low of 82.9250 a dollar, as it recovered all losses due to likely sale of dollars by banks on behalf of the Reserve Bank of India, dealers said. 

 

The Indian unit was pulled down earlier as banks bought the greenback on behalf of importers and oil companies, dealers said  

 

“RBI is very clear that they want to protect 83/$1. So, every time it breaches 82.85.82-90 they come to protect it,” said Ritesh Bhansali, vice-president, Mecklai Financial Services Ltd.  “More importantly, this moment cannot be taken as a best case scenario as this is happening amid thin volumes. The clear trend will be visible in the first week of January.”

 

Today, the rupee settled nearly flat 82.8575 a dollar as against 82.8475 on Tuesday.

 

The rupee opened flat against the dollar due to absence of significant cues as the year draws to an end, dealers said. 

 

The Indian unit was slightly weighed down today as some banks bought dollars for companies looking to make month-end payments. 

 

However, a slight easing of COVID-19 curbs in China improved appetite for the Indian unit. China’s National Health Commission announced it would stop the requirement for inbound travellers to go into quarantine from Jan 8. Beijing also eased rules to manage COVID cases to the less strict category-B from category-A. 

 

Crude oil prices rose today on hopes of a recovery in fuel demand as China continues to ease its COVID-related restrictions. However, gains were capped by concerns of a possible recession and resumption of operations at some US energy plants which were shut by winter storms. A rise in crude oil prices also weighed on the rupee.

 

The dollar index also went up which also weighed on the Indian unit. The dollar appreciated as the Bank of Japan clarified in its minutes of the meeting that widening of the yield band was meant to address distortion in 10-year Japanese government bonds pricing but this is not a step towards an exit from ultra-easy policy.

 

At 1631 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 104.22 against 104.20 on Tuesday. It was at 104.31 on Friday.

 

However, some banks sold dollars likely on the behalf of the Reserve Bank of India which supported the rupee, dealers said. 

 

The RBI intervened in the market around 82.90 level which kept the rupee from depreciating below the psychologically-crucial level of 83.00 to a dollar.  

 

 AT 1530 ISTAT 0900 ISTHIGHLOWPREVIOUS(AT 1530 IST)Spot rupee per $182.857582.842582.810082.925082.8475

 

FORWARDS

Premiums on dollar/rupee one-year forward contract fell sharply today as exporters sold dollars for forward delivery, noting a sharp rise in levels during the last two weeks, dealers said.

 

Premiums on dollar/rupee one-year forward contract have rebounded almost 20 basis points in the past two weeks as state-owned banks bought dollars for delivery later, likely on behalf of the RBI, dealers said. 

 

The premium on the one-year dollar/rupee contract was 171.35 paise, against 177.81 paise on Tuesday. On an annualised basis, the premium was at 2.05%, against the previous close of 2.15%.

 

OUTLOOK

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

 

“Volumes will continue to be low this week as we approach the New Year. Even the first week of January will not see much movement,” a dealer with a foreign bank said. 

 

Volumes in the currency market are likely to remain muted as foreign banks stay on the sidelines to close their books of accounts in the last month of the calendar year, dealers said.

 

Dealers have pegged immediate technical support for the rupee at 83.00 a dollar. The rupee is seen moving in a band of 82.60-83.00 a dollar, dealers said.

India Rupee:Down as bks buy dlrs for importers, oil cos; volume thin

 

 AT 1259 ISTAT 0900 ISTHIGHLOWPREVIOUS(AT 1530 IST)Spot rupee per $182.895082.842582.810082.925082.8475

 

MUMBAI – The rupee was slightly down against the dollar as banks bought dollars on behalf of importers, who wanted to make month-end payments, dealers said. 

 

Banks also bought dollars on behalf of oil marketing companies, which weighed on the rupee, dealers said. 

 

“The rupee is getting strong support at 82.92-82.93 level, but once it breaches that level, it will not stop before figure (83),” a dealer with a big state-owned bank said.

 

Volumes in the currency market remain muted as foreign banks stay on the sidelines to close their books of accounts in the last month of the calendar year, dealers said.

 

Dealers have pegged immediate technical support for the rupee at 83.00 a dollar.

 

The rupee is seen at 82.60-83.00 a dollar for the rest of the day, dealers said. (Kabir Sharma) 

India Rupee: Largely steady on lack of significant cues; volume dull

 

 AT 0944 ISTAT 0900 ISTHIGHLOWPREVIOUS(AT 1530 IST)Spot rupee per $182.840082.842582.812582.857582.8475

 

MUMBAI – The rupee was largely steady against the dollar today due to absence of significant triggers, dealers said. 

 

“Low volumes ahead of year-end will likely maintain major pairs within familiar levels,” said Kunal Sodhani, vice president – Global Trading Centre, FX and Rates Treasury at Shinhan Bank. “For USDINR, consolidation to continue between 82.65-83.00 (a dollar) levels.”

 

Volumes in the currency market remain muted as foreign banks stay on the sidelines to close their books of accounts in the last month of the calendar year, dealers said.

 

Meanwhile, improved risk appetite among investors after China announced relaxation in COVID-19 curbs supported the Indian unit, dealers said. China’s National Health Commission announced it would stop the requirement for inbound travellers to go into quarantine from Jan 8. Beijing also downgraded the rules to manage COVID cases to the less strict category-B from category-A.

 

However, a fall in domestic equity indices dampened sentiment for the Indian unit, dealers said. At 0954 IST, the Nifty 50 and the Sensex were both down 0.1%.

 

Dealers have pegged immediate technical support for the rupee at 82.90 a dollar.

 

The rupee is seen at 82.60-82.90 a dollar for the rest of the day, dealers said. (Aiswarya Santhosh)

India Rupee – Asia FX: Most down as dlr index rises, local shrs fall

 

NEW DELHI – Most Asian currencies fell against the greenback as the dollar index rose and Asian share indices fell in the early trade.

 

The dollar index rose in the Asian trade, tracking a rise in US treasury yields on Tuesday as investors were worried over major central banks’ monetary policy tightening path going ahead.

 

The US 10-year bond yield was at 3.84% Tuesday as against 3.75% Friday. 

 

Further, data showed, the US advance goods trade deficit in November narrowed to $83.35 bln from the prior month’s $98.8 bln. 

 

At 1005 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was at 104.30 against 104.20 on Tuesday. It was at 104.31 on Friday.

 

Asian equities fell tracking an overnight fall in the Wall Street. Jakarta Composite Index and PSEI index were down 0.9% and 0.2%, respectively, at 1006 IST.

 

The Philippine peso and the Indonesian rupiah were down 0.4% and 0.3%, respectively, against the greenback. 

 

Bucking the trend, the South Korean won was up 0.3% against the US unit as Finance Minister Choo Kyung-ho said on Tuesday that the government was not considering seeking an extra budget next year if the economic growth is in expected lines. (Ananya Chaudhuri)

India Rupee: Expected range for rupee – Dec 28

 

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

 

ParticipantsSUPPORTRESISTANCEState-owned bank83.0582.65State-owned bank83.0082.65Foreign bank83.0082.65Private bank83.0382.73Brokerage firm82.8882.58Brokerage firm83.00

82.40

(Ananya Chaudhuri)

 

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 (22) 6985-4000 

Send comments to [email protected]

 

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

Source: Cogencis

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