Currency Market News: Rupee slips 9 paise to 85.96 vs dollar; all eyes on RBI policy outcome

Rupee weakened by 9 paise to 85.96 against the US dollar in early trade on Thursday, weighed down by strong dollar demand from foreign investors, oil companies, and importers. Market participants are treading cautiously ahead of the Reserve Bank of India’s key monetary policy announcement scheduled for Friday.

At the interbank foreign exchange market, the rupee opened at 85.86 and soon slipped to 85.96, marking a 9-paise loss from the previous close. On Wednesday, the domestic unit had dropped 26 paise to settle at 85.87, registering its second consecutive session of decline.

Global cues, dollar index firm up

Meanwhile, the US dollar index which measures the greenback’s performance against six major currencies—was trading marginally higher by 0.07 per cent at 98.85. Crude oil prices, however, showed a mixed trend. Brent crude dipped 0.14 per cent to $64.77 per barrel in early futures trade.

Also Read:Currency Market News: Rupee weakens for second straight session, settles 29 paise lower at 85.90 vs dollar 

“The Indian rupee weakened past the 86 mark against the US dollar, driven by a storm of global risk aversion and importer demand for dollars. Moreover, the sentiment remained fragile ahead of the central bank’s policy review,” said Amit Pabari, MD at CR Forex Advisors.

Crude prices briefly surged as Russia-Ukraine tensions reignited. Brent crude rose to USD 65.70 per barrel, raising fresh concerns for India, a net oil importer.
“For India, which is a net oil importer, this spells trouble,” Pabari added.

Also Read:First Trade: Nifty up above 24,660; Dr. Reddy's Laboratories emerges as top Nifty50 gainer after double-upgrade  

Stock markets edge higher

Indian equities opened in the green on Thursday, supported by firm global cues and investor optimism ahead of the RBI policy decision. The benchmark Nifty50 gained 42.65 points or 0.17 per cent to open at 24,662.85, while the Bank Nifty edged up 0.03 per cent to 55,695.

From the broader markets, smallcap stocks outperformed both largecaps and midcaps.

Among the Nifty50 constituents, Dr. Reddy's Laboratories, Eternal, Cipla, Power Grid Corporation, and Reliance Industries were the top gainers. On the other hand, Bajaj Finance, Tata Consumer Products, HUL, Bajaj Finserv, and Nestle were among the laggards.

Foreign institutional investors (FIIs) were net buyers in Indian equities, purchasing shares worth Rs 1,076.18 crore on Wednesday, according to provisional data from stock exchanges.

(With PTI Inputs)