Recording losses for the fourth consecutive session, the rupee edged down 11 peas against the US dollar on Thursday, April 8, to stand at 74.58 (tentative) amid concerns over the second wave of COVID-19 in the country affecting the economic recovery. In the interbank forex market, the domestic unit opened at 74.38 against the dollar and traded between 74.19 and 74.93 throughout the session. In a trade session early today, the local unit gained 10 paise to 74.37 against the dollar. It finished at 74.58 against the greenback, recording an 11 paise decline from its previous close of 74.47.
Meanwhile, the dollar index, which measures the strength of the greenback against a basket of six peers, slipped 0.06% to 92.39. On Wednesday, April 7, the domestic unit fell as low as 105 paise, marking its largest single-session decline in more than 20 months. the rupee has now depreciated by 146 peas in four consecutive sessions of losses.
There were five reasons for yesterday’s rise on USDINR 1) A company bought in CF for outward dividend remittance, 2) 1.00 crore lac of bond purchase announced by RBI a form of QE 3) stop loss triggered after 73.92 was violated 4) panic of buying by importers 5) huge carry unfolding as the perception of a complete foreclosure prevailed, thus degrading GDP which is expected to grow by 24 % in the first quarter by a conservative estimate, ” said Anil Kumar Bhansali, Director of the Treasury, Finrex Treasury Advisors.
On the domestic stock market front, the BSE Sensex finished 84.45 points or 0.17% higher to 49,746.21, while the larger NSE Nifty climbed 54.75 points or 0.37% to 14,873.80. “ Due to the Reuters rate crash, Forex rates have become volatile and the USDINR is listed at a high of 74.96 and the current level is 74.75 as banks have heard quotes between 25 and 30 ps to their customers, ” Anil added. Kumar Bhansali.
According to stock exchange data, foreign institutional investors were net buyers in the capital market as they bought shares worth Rs 227.42 crore on April 7. Futures contracts on Brent crude, the world’s benchmark for oil, were trading 0.51 percent at $ 62.84 a barrel.