Rupee trims early gains to end flat at 73.45 against US dollar on late dollar demand from importers

The rupee opened higher at 73.33 amid sharp gains in local stock markets

Press Trust of India October 29, 2018 19:34:41 IST
Rupee trims early gains to end flat at 73.45 against US dollar on late dollar demand from importers

Mumbai: The rupee ended almost flat at 73.45 against the US dollar on Monday after its initial gains were erased by a late dollar demand from importers despite strong equity markets and the RBI's move to ease the liquidity crunch.

Despite the initial bounce, the home unit appeared to struggle, as the dollar remained broadly firm.

Foreign investors also pulled out Rs 2,230.79 crore from capital markets on Monday amid the dollar hovering near 10-week high and hitting 96.66 against the basket of six global currencies.

The rupee opened higher at 73.33 amid sharp gains in local stock markets.

Rupee trims early gains to end flat at 7345 against US dollar on late dollar demand from importers

Representational image. Reuters.

The local currency, however, gave up initial gains due to capital outflows and a firming dollar to hit a session low of 73.53.

The rupee made a comeback in the closing hour to settle at 73.45, showing gains of just 2 paise over the previous close.

Brent crude oil futures were down 31 cents at $77.31 a barrel, while WTI Futures fell by 28 cents to $67.31.

Meanwhile, market benchmark Sensex rallied over 718 points to end above the 34,000-level, while the broader 50-share Nifty rose over 220 points to close above 10,250.

At the same time, the Reserve Bank's decision to pump in Rs 40,000 crore into the system in November through the purchase of government securities, with an aim to tackle liquidity crunch, failed to bring cheer to the forex market, but arrested any significant fall in the rupee.

In another development, India and Japan on Monday concluded a $75 billion bilateral currency swap agreement, a move that will help in bringing greater stability in foreign exchange and capital markets in the country.

"India and Japan have signed currency swap agreement worth $75 billion – a step will go long way in soothing frayed nerves of Rupee bulls," said V K Sharma, Head PCG & Capital Markets Group, HDFC Securities.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 73.4181 and for rupee/euro at 83.6942. The reference rate for rupee/British pound was fixed at 94.2644 and for rupee/100 Japanese yen at 65.62.

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