Against the US dollar, the rupee fell 7 paise to Rs 84.73 in early trading on December 9. Foreign money leaving the country and a decrease in activity in the Indian stock market are the reasons for the dip. The strong demand for dollars from importers and international banks is the reason why the Indian rupee is still weak.
The US dollar index, or DXY, was up 0.08 percent at 106.14. At the Interbank foreign exchange, the Indian rupee started at Rs 84.70 versus the US dollar. It dropped 7 paise from its previous close to reach Rs 84.73 in the first transaction.
However, a dollar rally overnight might keep the local currency weak during Monday’s trading. Compared to Rs 84.6925 in the previous session, the Rupee began at Rs 84.6800 versus the US dollar. This Monday’s USDINR spot price range is still broadly between Rs 84.5500 and Rs 84.7000. Domestic traders will anticipate a significant inflation figure this week. On Friday, the rupee gained 5 paise versus the US dollar, closing at Rs 84.66.
In the domestic arena, after the RBI’s monetary policy pronouncement last week, all eyes will be on the Industrial Production (IIP) and CPI figures. The 50 basis point CRR decrease supported the rupee and provided much-needed liquidity.
Because of worries over inflation, the Reserve Bank of India held its key interest rate steady on Friday. But to boost lending and help the faltering economy, it lowered the Cash Reserve Ratio or the amount banks are required to hold with the central bank.
The RBI announced on Friday that India’s foreign exchange reserves increased by $1.51 billion to USD 658.091 billion for the week ended November 29. The reserves had dropped $1.31 billion to $656.582 billion in the week prior.
