Rupee slips 11 paise to close at 76.55 against US dollar

AgenciesUpdated: Monday, March 14, 2022, 08:10 PM IST
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High inflation also affected market sentiment, forex dealers said. / Representative image |

The rupee declined by 10 paise to close at 76.54 against the US dollar on Monday amid moderating crude oil prices and foreign fund outflows.

High inflation also affected market sentiment, forex dealers said.

However, a rally in the equity markets restricted the rupee's fall, they added.

At the interbank foreign exchange market, the rupee opened at 76.63 against the American dollar. It regained some lost ground during the session but remained in the negative territory as investors turned towards safe-haven assets.

During the day, it swung between a high of 76.52 and a low of 76.69. The local unit finally settled at 76.54 against the dollar, down 10 paise from the previous close.

''Rupee traded in a narrow range for the third successive session but losses for the currency were limited as uncertainty between Russia and Ukraine recedes. Also, global crude oil prices retraced from higher levels and that too supported the rupee,'' Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services said.

Market participants remained cautious ahead of the important inflation number and a higher number could restrict gains for the currency, he added.

''The US Fed's statement and policy update will be keenly watched by currency participants as markets expect a 25bps hike in March policy. Russia-Ukraine geopolitical tensions shall keep some limitations on Fed's hawkish approach anticipated in the last policy due to record-high inflation,'' Jateen Trivedi, Senior Research Analyst at LKP Securities said.

Rupee can be seen in a range of 76.25-77.25 broadly, he added.

Retail inflation inched up to an eight-month high of 6.07 per cent in February, remaining above the RBI's comfort level for the second month in a row, mainly on account of a rise in food prices, official data released after market hours on Monday showed.

The wholesale price-based inflation in February rose to 13.11 per cent on hardening of prices of crude oil and non-food items, even though food articles softened.

After two months of mild easing, WPI inflation accelerated in February and remained in double digits for the 11th consecutive month, beginning April 2021.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.39 per cent lower at 98.79.

On the domestic equity market front, the 30-share Sensex ended 935.72 points or 1.68 per cent higher at 56,486.02, while the broader NSE Nifty advanced 240.85 points or 1.45 per cent to 16,871.30.

Global oil benchmark Brent crude futures slipped 3.28 per cent to USD 108.97 per barrel.

Foreign institutional investors continued their selling spree in Indian markets as they offloaded shares worth Rs 2,263.90 crore on a net basis on Friday, as per exchange data.

(With inputs from PTI)

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