Rupee settles on flat note at 83.51 against U.S. dollar

Image used for representational purpose.
| Photo Credit: Reuters

The rupee settled on a flat note at 83.51 (provisional) against the U.S. dollar on Tuesday, as the support from positive domestic markets and favourable inflation data was negated by strong US Dollar and foreign fund outflows.

Forex traders said the rupee remains under pressure due to ongoing elections as well as foreign fund outflows and the same shall subside once the results are out.

At the interbank foreign exchange market, the local unit traded in a narrow range. It opened at 83.51, and touched an intraday low of 83.52 during the day.

The domestic unit finally settled for the day at 83.51 (provisional), unchanged from its previous close.

On Monday, the rupee consolidated in a narrow range and settled flat at 83.51 against the U.S. dollar.

“We expect the rupee to trade with a slight negative bias on the strong U.S. dollar and a rise in crude oil prices. Sustained FII outflows may further pressure the rupee,” Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.

Mr. Choudhary further noted that a positive tone in the domestic markets may support the rupee at lower levels.

Traders may take cues from PPI data from the U.S. on Tuesday and CPI data later this week. “USDINR spot price is expected to trade in a range of ₹83.30 to ₹83.80,” he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 105.26, higher by 0.04%.

Brent crude futures, the global oil benchmark, fell 0.04% to $83.33 per barrel.

On the domestic equity market, the 30-share BSE Sensex advanced 328.48 points, or 0.45%, to close at 73,104.61 points. The broader NSE Nifty settled 113.80 points, or 0.51%, higher at 22,217.85.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, as they offloaded shares worth ₹4,498.92 crore, according to exchange data.

On the macroeconomic front, India’s retail inflation eased to an 11-month low of 4.83% in April, as prices of some kitchen items declined, even though the overall food basket firmed up marginally, according to government data released on Monday.

The Consumer Price Index (CPI)-based retail inflation was 4.85% in March. It was 4.7% in April 2023.