Rupee's upside may limit on corporate outflows; local unit ends 22 paise up

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IANS | 17 Aug, 2022
The Indian rupee has appreciated 22 paise on Wednesday to close at 79.44 against the US dollar on easing Brent crude oil prices and uptick in domestic equities.

But, further appreciation of rupee can be capped by the corporate outflows lined up in this week.

At the interbank foreign exchange market, rupee ended at 79.44 as against 79.66 close on the previous trading session on Friday against the US dollar.

Indian financial markets were closed on August 15 and 16 on account of Independence day and Parsi New year.

"USD INR spot closed 20 paise lower at 79.44. Fall in oil prices and higher global equity markets helped Rupee to gain against US Dollar. FPI flows have been persistently positive and that is positive for Rupee. However, there are corporate outflows lined up over this week and that can limit downside in USD INR. Over the near term we expect a range of 79 and 80 on spot," said Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.

Brent crude oil prices which were trading at $98 a barrel on Friday has eased to $92.04 per barrel.

Crude oil prices in the international market has fallen due to disappointing China's economic data that forced China's central bank to hike lending rates. The prices on crude continue its fall on Tuesday too, but by afternoon trade it rose.

Meanwhile, Sensex ended up 417.92 points or 0.70 per cent at 60,260.13, and Nifty ended 119.00 points or 0.67 per cent higher at 17,944.25. About 2,019 shares have advanced, 1,405 shares declined and 132 remained unchanged.

BSE midcap ended up 0.64 per cent, whereas BSE SmallCap and BSE LargeCap closed 0.53 per cent and 0.71 per cent, respectively.

BSE IT index and BSE Consumer Durables index ended over 1 per cent up on Wednesday.

Moreover, hawkish comments from several Fed officials indicate that the US Fed is still likely to opt for steep rate hikes and act tough on persistently high price pressures.

"Markets are now eyeing the minutes of the Fed's July meeting for further cues about the monetary policy path of the US central bank that will further dictate the trend for the Indian rupee. We envisage the rupee to trade in the 79.20-80.10 range in the coming days," said Sugandha Sachdeva, Vice President - Commodity and Currency Research, Religare Broking Ltd.