The Indian rupee opened at an record opening low despite strengthening against the US dollar on Friday, as the decline in the Chinese yuan and Japanese yen had negatively impacted emerging market currencies. The domestic unit had hit an all-time closing low on Thursday.
The local currency strengthened by five paise to open at Rs 83.60 against the greenback, according to Bloomberg. It had closed at Rs 83.65 on Thursday.
“A major outflow of $1.7 billion from Vodafone’s Indus Tower stake sale has exerted considerable pressure on the rupee and the surge in oil prices by nearly 10.5% may have been factors that triggered the rupee’s all-time low,” said Amit Pabari, managing director at CR Forex Advisors.
On Friday, Brent crude was trading 0.16% lower at $85.57 per barrel amid a solid demand outlook. At 105.568, the US dollar index was trading 0.02% lower.
“Foreign inflows into Indian bonds are projected to reach $2 billion by June 28, driven by their inclusion in a widely-followed JPMorgan index, and strong economic fundamentals coupled with the Reserve Bank of India’s substantial reserves of approximately $655 billion provide a significant cushion to the rupee,” said Amit Pabari, managing director of CR Forex Advisors.
“For the dollar/rupee, Rs 83.72, the high hit by the non-deliverable fund may remain the first important resistance to watch out,” said Kunal Sodhani, vice president at Shinhan Bank. “If this breaks, it could trigger several stop losses, pushing the USD-INR pair towards Rs 83.85 levels, with Rs 83.40 currently serving as a base.”
