Finance & Economy | Industry And Cluster | News & Insights

Rs. $ Rally

Published: September 2, 2020
Author: G.Thulessiraman

On Tuesday, the rupee rallied 73 points (paise) up breaking the Rs.73 mark against the US Dollar. This breakout has supported the liquidity boosting measures which were announced by the RBI. A positive trend and a weak back overseas supported the local currency. At the inter-bank Forex market, the domestic unit opened at 73.18 against the US dollar and shuttled between 72.75 and 73.19. It finally finished at 72.87, up 73 paise from its previous close of 73.60.

On Monday the RBI had issued a host of steps which had to be followed. The steps included- term repo operations totaling Rs.1 lakh crore in mid-September to ease pressure on liquidity and maintain congenial financial conditions with a view to ensuring sustainable recovery of the economy. The steps also indicated the recent appreciation of the rupee has helped contain imported inflationary pressure, which many viewed as a signal that the central bank may go slow on dollar purchases.

On the domestic equity markets front, the BSE Sensex closed 272.51 points or 0.71 per cent higher at 38,900.80. The NSE Nifty advanced 82.75 points or 0.73 per cent to settle at 11,470.25. Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 3,395.49 crore on Monday, according to exchange data.

Gaurang Somaiya, Forex and Bullion Analyst at Motilal Oswal Financial Services said that, “Rupee rose following fund inflows in Indian equities and weakness in the dollar against its major crosses.”

According to Sriram Iyer, Senior Research Analyst, Reliance Securities, “The US Dollar continued to extend losses this Tuesday as investors continued to exit the greenback on the back of a dovish Fed.” Moreover, the local unit also gained amid speculation that the RBI could be more unrestricted towards rupee appreciation after it said a strong rupee is helping contain imported inflationary pressures, Iyer said.

NEWS REPORTED BY:

VRIDHI BHAGNARI.

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