Rupee falls 50 paise to close at 81.82 despite soft dollar

The rupee edged lower against the earlier session on Monday, despite softening of the dollar driven largely by large corporate outflows, dollar demand from oil companies and higher crude prices in the international market.

Bloomberg showed the rupee was changing to 81.8175 per dollar on Friday after opening at 81.2162 compared to its previous close of 81.3163.

According to PTI, the domestic currency declined 47 paise to provisionally close at 81.80 against the US dollar.

The USDINR pair was bought at a low of 81.25, driven by Vedanta’s dividend outflow, MSCI (stocks) outflows, and oil buying took the pair to a high of 81.79. Thus, despite Asian currencies rising against the dollar, the rupee was not able to. More was sold for capitalisation, said Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors.

The inability of the pair (USD/INR) to move below 81 last week in the face of positive news is likely causing interbanks to reconsider short rupee positions, one trader told Reuters, while another trader said MSCI’s There was talk of rebalancing. dollar outflow but there was doubt as to whether this would happen.

A 1.4 per cent rise in oil prices, which is a matter of concern as India is one of the biggest commodity consumers, put pressure on the rupee.

The dollar hit near a five-month low on Monday as investors hoped that the lifting of economic sanctions in China would eventually improve the global economy and commodity demand, pushing the dollar lower against the yuan.

“While the easing of some restrictions does not yet equate to a wholesale shift away from the dynamic COVID Zero strategy, it is further evidence of a shifting outlook, and financial markets remain firmly focused on the long-term outlook in the near term.” Economist Taylor Nugent told Reuters “activity has been impacted as virus cases continue.”

News of an EU embargo and price limits on Russian crude starting on Monday helped oil prices rise after OPEC+ countries reiterated their production cuts.