On Monday, the rupee gained 8 paise to 84.38 in early trade after a run of losses recently. This gain was seen against a strong US dollar and also despite sustained foreign fund outflows, as global crude oil prices came down somewhat. To forex traders, the Indian rupee opened at 84.42 but strengthened to 84.38 intra-day. The currency experienced a rebound after it had dropped to its record low of 84.46 against the dollar on Thursday ahead of the Guru Nanak Jayanti market holiday. The dollar index, which reflects how the US dollar is performing as compared to the six major currencies, barely changed and stood at 106.68 with an increase of 0.06%. International crude oil prices increased by 0.51% to USD 71.40 per barrel, and still mounting pressure on the rupee. Analysts say that the inflationary pressures are steadily being registered, and remain a significant challenge for the rupee.
. Wholesale price inflation in India rose to 2.36 percent in October- a four-month high which was precipitated by high food and manufactured goods prices. Retail inflation also breached the upper tolerance limit for the Reserve Bank of India as it surged to 6.21 percent in October but primarily through higher food price inflation.
Due to higher food price inflation US dollar has gone from strength to strength which is putting immense pressure on Indian rupee. India’s trade deficit swelled to USD 27.14 billion in October compared to the previous year even though its merchandise exports increased by a strong 17.25 percent, which were the highest after two years of successive high.
In the equity markets, the Sensex retreated by 125.08 points or 0.16 percent to 77,455.23 while Nifty fell by 20.15 points, or 0.09 percent, at 23,512.55. FIIs were net sellers with a Rs 1,849.87 crore disposal on Thursday.
India’s foreign exchange reserves declined by $ 6.477 billion and ended the week ending November 8 at $ 675.653 billion, said Reserve Bank of India latest report.
