Rupee fails to recover despite fall in US dollar

The rupee failed to recover in morning commerce on Tuesday despite a weak dollar and was hovering at the day gone by’s file low of 83.34 in opposition to the US dollar at 11.28 a.m.

Although the dollar index fell to 103.20, its lowest stage in two-and-a-half months, the rupee didn’t achieve as anticipated. Traders attributed this to importers resembling oil corporations shopping for extra {dollars} as a hedge to reap the benefits of the low worth.

Other Asian currencies have gained due to the decline in the US dollar.

The rupee had crashed by 7 paise to settle at 83.34 vis-a-vis the US dollar on Monday, amid a rise in crude oil costs and international funds flowing out of inventory markets.

Brent crude futures, the worldwide oil benchmark, rose 0.66 per cent to USD 81.14 per barrel on Monday whereas the Sensex declined 139.58 factors to settle the 65,655.15 stage. The Nifty fell 37.80 factors to 19,694.

Foreign institutional traders (FIIs) have been internet sellers in the capital markets on Friday as they offered shares value Rs 477.76 crore, in accordance to trade knowledge.

India’s international trade reserves decreased by USD 462 million to USD 590.321 billion for the week ended November 10, in accordance to the newest RBI knowledge launched on Friday. Any decline in foreign exchange reserves leaves much less headroom for the RBI to intervene and prop up a weakening rupee.

On Friday, the rupee had closed at 83.26 in opposition to the dollar. The earlier file low registered by the rupee was 83.33 in opposition to the dollar on November 13, this yr.

The rupee has been fluctuating inside a slim band because the RBI sells {dollars} when the rupee goes right into a free fall.

(With inputs from IANS)