In early trade on Tuesday, rupee took a step back , dropping 11 paise to 90.77 against the US dollar. Starting at 90.63 at the interbank foreign exchange market, the local unit immediately lost ground and was not even able to take advantage of the initial news of the deal. Although the deal was perceived to be positive, especially given that a roadmap for negotiation was established while not disrupting anything right away, prevailing market moods changed after a thorough analysis of the terms. Experts have stated that the energy imports from Russia by India, a critical factor for the deal, will remain subject to US oversight.
According to Amit Pabari, Managing Director at CR Forex Advisors, the USD/INR pair is likely to drift toward the 91.00-91.20 range in the coming days, provided the strong support zone of 90.00-90.20 holds.
Additionally, Pabari highlighted that the Reserve Bank of India remained an important anchor that is perceived to be using the inflows to purchase dollars from the market rather than the rupee rising significantly. Even with the inflows amounting to almost USD 2 billion this month from foreign institutional investors, the market was skeptical about the sustainability of the inflows due to the mixed global policy signals.
Meanwhile, the dollar index was slightly lower at 97.79, and Brent crude futures dipped to USD 68.85 per barrel. On the domestic equity front, the Sensex managed a gain of 149 points to reach 84,214.75, while the Nifty rose 44.45 points to 25,911.75.
Also read: Gold and silver prices drop 2 pc after two-day rally
Follow us
