Indian Rupee: Expected To Recoup Gains

9 Feb 2022 , 09:11 AM

The Indian rupee is expected to recoup gains in opening trades on Wednesday, 09 February 2022 as international crude oil prices show signs of receding. Meanwhile, all eyes are now awaiting RBIs monetary policy decision due tomorrow. The Reserve Bank of India (RBI)s rate-setting Monetary Policy Committee (MPC) meeting commenced on 8 February 2022 and the outcome would be announced on 10 February 2022. The RBI may hold its repo rate steady but an increase in the reverse repo rate is expected as part of a process to reduce the surplus liquidity poured into the markets earlier during the pandemic, as per reports.

On Tuesday, rupee fell 5 paise to close at 74.74 against the US dollar on Tuesday. At the interbank foreign exchange, the rupee opened at 74.65 against the American dollar, and later witnessed an intra-day high of 74.57 and a low of 74.80 against the greenback. The local unit finally ended the day at 74.74, down 5 paise from the previous close. In the previous session on Friday, the rupee had settled at 74.69 against the greenback. The forex market was closed on Monday.

The domestic equity barometers ended with decent gains after a volatile session on Tuesday. The barometer index, the S&P BSE Sensex, added 187.39 points or 0.33% to 57,808.58. The Nifty 50 index gained 53.15 points or 0.31% to 17,266.75. Foreign portfolio investors (FPIs) sold shares worth Rs 1,967.89 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,115 crore in the Indian equity market on 8 February, provisional data showed.

Overseas, Asian stocks are trading higher on Wednesday, with stocks in Hong Kong leading gains regionally. U.S. stocks rose on Tuesday as investors digested another batch of corporate earnings and awaited key inflation data later this week. Meanwhile, investors await the release of U.S. consumer inflation data expected Thursday for clues on how the Federal Reserve could react to the rising price pressures.

Meanwhile, dollar could ride higher on the back of sharply higher US treasury yields. Yield on 10-year Treasuries topped 1.97% on Tuesday, the highest since November 2019 and a jump from about 1.73% just two weeks ago.

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