High oil prices weigh on Indian rupee, falls against UAE dirham

Staff Report/Dubai
Filed on October 6, 2021

(Agencies file)

In the Indian interbank market, the rupee opened on a weak note at 74.63, then fell further to 74.65.

The Indian rupee fell 21 paise to 74.65 against the US dollar (20.34 versus the UAE dirham) on Wednesday morning as rising oil prices and strengthening of the American currency weighed on investor sentiments.

In the Indian interbank market, the rupee opened on a weak note at 74.63, then fell further to 74.65, registering a decline of 21 paise from the last close.

Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors, said there was no effect of Moody’s upgrade of India’s rating outlook to “stable” from “negative” on the rupee as the sovereign rating has not been restored.

International rating agency Moody’s on Tuesday upgraded India’s rating outlook to “stable” from “'negative”, saying a recovery is underway in Asia’s third-largest economy and growth this fiscal will surpass the pre-pandemic rate.

Moody’s Investors Service, however, kept India’s sovereign rating at ''Baa3'' -- which is the lowest investment grade, just a notch above junk status.

Brent was trading at $82.56 per barrel on Wednesday, up 1.6 per cent while WTI was up 0.37 per cent at $79.22.

Bhansali sees the rupee trading in the range of 74.30 to 74.80.

"Rupee is awaiting for monetary policy which is starting today. Exporters to sell only above 74.80 and importers to buy near 74.40/45 levels for their near-term exposure," he noted.

On the Indian equity market front, the 30-share Sensex was trading 77.72 points or 0.13 per cent lower at 59,667.16. The broader NSE Nifty was trading 27.45 points or 0.15 per cent down at 17,794.85.

(with inputs from PTI)

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