Mumbai: The rupee on Tuesday rebounded from its all-time low to trade higher by 2 paise at 78.02 against the US dollar in early trade. At the interbank foreign exchange, the rupee opened at 78.02 against the dollar, registering a rise of 2 paise over the previous close.
In opening deals, the domestic unit also rose to 77.90 against the US currency, but could not sustain the gains and touch 78.06. On Monday, the rupee declined by 11 paise to close at a new high of 78.04 against the US dollar. The Indian rupee opened flat against the dollar on Tuesday as easing domestic inflation concerns dampened the greenback’s overnight strength, said Sriram Iyer, senior research analyst at Reliance Securities.
Retail inflation eased to 7.04 per cent in May mainly on softening food and fuel prices, as the government as well as the RBI took steps to control rising prices through duty cuts and repo rate hikes. Extended. However, the inflation print remained above the Reserve Bank’s upper tolerance level of 6 per cent for the fifth consecutive month. This may prompt the central bank to hike the repo rate further in its next policy meeting in August.
Meanwhile, crude oil prices remained bullish on Tuesday morning and the appreciation bias was kept limited. Iyer said Asian and emerging market peers have made a mixed start, but higher inflation readings could keep the bias for currencies weak.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.01 per cent to 105.08, supported by fears of a global economic slowdown and an aggressive rate hike path from the US Fed. Global oil benchmark Brent crude futures fell 0.02 per cent to $122.25 a barrel.
On the domestic equity market front, the BSE Sensex was trading 145.13 points or 0.27 per cent lower at 52,701.57, while the broader NSE nifty It fell 85.30 points or 0.54 per cent to 15,689.10. Foreign institutional investors were net sellers in the capital markets on Monday as they offloaded shares worth Rs 4,164.01 crore, according to exchange data.
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