The Indian rupee strengthened by 6 paise to open at 85.48 against the US dollar on Monday, following a turbulent trading session last Friday when it hit a fresh record low.
On Friday, the rupee closed at 85.54, marking its steepest single-day decline since February 2023. The domestic currency had depreciated sharply, hitting a new all-time low of 85.81 during the last session. The rupee opened at 85.32 per dollar and closed at 85.26 on Thursday.
The significant weakening of the rupee on Friday was attributed to month-end dollar demand from importers, particularly oil marketing companies, and the global strength of the US dollar. Till Friday rupee had depreciated by 2.9% in year-to-date terms, making it one of the least volatile currencies among its Asian counterparts. In comparison, the Japanese yen and South Korean won have fallen by 10% and 12% respectively this year.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, noted that the rupee is expected to trade in a range of 85.30 to 85.60 during the day. Bhansali advised exporters to wait with a stop-loss at 85.15, as the rupee continues to face pressure from ongoing dollar demand. Meanwhile, he recommended importers to buy the rupee on any dips, as the currency remains in a weakening mode.
Bhansali also mentioned that Friday’s volatility was partly due to the Reserve Bank of India intervening in the market to cover its oversold positions. The rupee fluctuated between 85.31 and 85.81 before the RBI sold dollars to stabilise the currency, closing at 85.5325 a dollar. With a more stable current account deficit outlook, Bhansali indicated that the rupee is expected to open around 85.41 and remain within the range of 85.30 to 85.60.
. Read more on Markets by NDTV Profit.The rupee is expected to trade in a range of 85.30 to 85.60 for the day, according to an expert. Read MoreMarkets, Business, Notifications
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