Indian Rupee: Dollar Recovery To Weigh

22 Jul 2022 , 09:22 AM

Recovery in rupee seems to be short lived as dollar is seen recovering after yesterdays sharp decline, weighing on the domestic currency. The Indian rupee recovered from its all-time low of 80.06 to close 20 paise higher at 79.85 against the US dollar on Thursday following overall weakness in crude oil prices and fresh foreign fund inflows. At the interbank forex market, the local unit opened lower at 80.03 against the greenback and fell further to an intra-day low of 80.06. The local unit recouped losses later and settled at 79.85, registering a rise of 20 paise over its previous close. On Wednesday, the rupee for the first time settled below the 80-level against the US currency due to strong dollar demand from importers and fiscal slippage concerns. The dollar index, which measures the greenbacks strength against a basket of six currencies, was down 0.04 per cent at 107.03. Domestic benchmark indices closed with decent gains on Thursday. The S&P BSE Sensex, was up 284.42 points or 0.51% to 55,681.95. The Nifty 50 index gained 84.40 points or 0.51% to 16,605.25. Foreign portfolio investors (FPIs) bought shares worth Rs 1,799.32 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 312.29 crore in the Indian equity market on 21 July, provisional data showed. National Democratic Alliance (NDA) candidate Droupadi Murmu was elected the 15th President of India. She was declared elected on Thursday after four rounds of counting, posting an unassailable lead over her rival and the Oppositions candidate Yashwant Sinha, who conceded the election thereafter. The President-elect will take oath on July 25. Overseas, Asian stocks are trading mixed on Friday as investors digest Japans inflation data. Official data released Friday showed that prices in Japan rose 2.2% in June compared to a year ago. It followed rises of 2.1% in May and April. The Asian Development Bank has cut the growth forecast for China due to concerns over the countrys zero-Covid approach and strict lockdowns, which have also impacted its troubled property market. Gross domestic product growth for the worlds second largest economy is expected to be at 4% in 2022, down from an earlier estimate of 5%, ADB said in a report published Thursday. Wall Streets main indices rose on Thursday boosted by a late-afternoon rally and gains in heavyweight growth stocks, including Tesla. The European Central Bank raised interest rates by more than expected on Thursday. The ECB raised its benchmark deposit rate by 50 basis points to zero percent, as it joined global peers in jacking up borrowing costs. It was the euro zone central banks first rate hike for 11 years. Ending an eight-year experiment with negative interest rates, the ECB also increased its main refinancing rate to 0.50 percent and promised further rate hikes possibly as soon as its next meeting on September 8. Powered by Commodity Insights