Indian rupee rises against UAE dirham, helped by positive trend in equities

The Indian rupee appreciated 10 paise to 82.66 against the US dollar (22.52 versus the UAE dirham) in early trade on Tuesday on the back of a positive trend in the Indian equities and a relatively weaker greenback.

However, foreign capital outflows restricted the gain in the South Asian currency, forex traders said.

At the Indian interbank foreign exchange, the rupee opened strong at 82.68 against the dollar, then gained further ground to 82.66, a rise of 10 paise over its last close.

In early deals, it was moving in a tight range of 82.69-82.65.

On Monday, the rupee fell 68 paise to close at a one-month low of 82.76 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.15 per cent to 103.46. Brent crude futures, the global oil benchmark, advanced 0.98 per cent to $81.78 per barrel.

This week, the key trigger for the markets is likely to be the decision of the Reserve Bank of India’s Monetary Policy Committee on the interest rate that will be announced on Wednesday.

Economists at SBI on Monday said they expect the Reserve Bank of India (RBI) to hit the pause button on an interest rate hike at its upcoming monetary policy review this week.

However, according to some experts, the RBI is likely to settle for a smaller 25 basis points repo rate hike as retail inflation is showing signs of softening and the US Fed moderating the pace of increase in its benchmark interest rate.

On Tuesday, the 30-share BSE Sensex was trading 89.98 points or 0.15 per cent higher at 60,596.88 points. The broader NSE Nifty advanced 23.95 points or 0.13 per cent to 17,788.55.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Monday as they offloaded shares worth Rs12.18 billion, according to exchange data.

(With inputs from PTI)

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