Indian Rupee: Seen Extending Losses

3 Oct 2022 , 10:01 AM

The Indian rupee is seen extending weakness against the dollar on Monday amid weak economic developments on the domestic front. Indias eight core infrastructure sectors output grew 3.3% in August 2022, lowest in past nine months, as against 12.2% in the year-ago period, according to official data released on Friday. Besides, Overseas, Asian stocks are trading lower on Monday amid fears that central banks across the world will keep hiking rates until inflation is under control. China markets are closed for the Golden Week holiday, and South Koreas market is also closed. On Friday, rupee extended its initial gains and settled 37 paise higher at 81.36 against US dollar, after the Reserve Bank of India raised the benchmark lending rate by 50 basis points. The Reserve Bank of Indias Monetary Policy Committee announced a 50 basis points repo rate hike to 5.9% on Friday. With this, the central bank has raised benchmark interest rate by a total 1910 basis points to counter the sticky inflation in the economy. The monetary policy committee remains focused on withdrawal of accommodation to ensure that inflation remains within target while supporting growth, RBI Governor Shaktikanta Das said on Friday. At the interbank forex market, the local currency opened at 81.60 against the greenback. It witnessed an intra-day high of 81.17 and a low of 81.69 during the session. It finally ended at 81.36, up 37 paise from its previous close. Meanwhile, sustained foreign fund outflows are also seen hammering the local unit. Foreign portfolio investors (FPIs) sold shares worth Rs 1,565.31 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 3,245.45 crore in the Indian equity market on 30 September, provisional data showed. Powered by Commodity Insights