Indian Rupee: Likely To Stay Range Bound

8 Feb 2022 , 09:11 AM

The Indian rupee could stay range bound, awaiting the upcoming monetary policy decision by the Reserve Bank of India later this week. The Reserve Bank of Indias (RBI) Monetary Policy Committee (MPC) will meet on 8-10 February 2022. The RBIs MPC will announce its interest rate decision on 10 February 2022.

Meanwhile, higher crude oil prices and surging U.S. Treasury yields to their highest levels since 2019 that is likely to pull greenback higher could further weigh on the domestic currency. Last week, rupee appreciated 37 paise against the American currency. On Friday, rupee surged 18 paise to close at 74.70 against the US dollar tracking the weakness of the American currency in the overseas market. At the interbank forex market, the local unit opened strong at 74.71 against the greenback and witnessed an intra-day high of 74.68 and a low of 74.77. It finally settled at 74.70, a rise of 18 paise over its previous close. In the previous session, the rupee had settled at 74.88 against the greenback.

Domestic equity barometers ended with deep cuts after a weak session on Tuesday. The barometer index, the S&P BSE Sensex, dropped 1,023.63 points or 1.75% to 57,621.19. The Nifty 50 index fell 302.70 points or 1.73% to 17,213.60. Foreign portfolio investors (FPIs) sold shares worth Rs 1,157.23 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 1,376.49 crore in the Indian equity market on 7 February, provisional data showed.

Overseas, Asian stocks are trading mixed on Tuesday, as investors in the region continue to assess the inflation and central bank policy outlook. Wall Street ended lower on Monday as traders weighed the latest quarterly earnings reports and awaited key U.S. inflation data. Corporate earnings were again a source of volatility for stocks on Monday. Big inflation news is on the horizon, with the Labor Department on Thursday set to release consumer price index data for January.

Meanwhile, the U.S. dollar index hovered at 95.425.

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