Home Market Rupee springs back from 3-mth low; FOMC minutes in focus

Rupee springs back from 3-mth low; FOMC minutes in focus


Mumbai: Breaking a two-session losing run, the rupee today claimed some of its lost ground to end higher by 3 paise at 64.76 against the US dollar ahead of the release of minutes from Januaryâ€[TM]s FOMC meeting.

The home currency largely managed to withstand early sharp volatility before recovery.

It plunged to hit a fresh three-month low of 64.95 in intra-day levels – its lowest since November 22 – tracking overnight greenback strength.

The rupee had depreciated by a staggering 88 paise in the recent spell of sell-offs.

Growing uncertainties over an impending Fed rate hike along with heavy capital outflows predominantly impacted the sentiment at the forex market.

A high degree of caution prevailed on the trading front ahead of an outcome from the US Federal Reserve's January meeting minutes, which may signal the pace of any interest-rate rises.

Earlier in the day, maintaining its bearish undertone, the Indian unit resumed sharply lower at 64.90 from Tuesday's closing value of 64.79 at the Interbank Foreign Exchange (forex) market due to heavy demand for the American currency from importers.

After drifting to a fresh 3-month low of 64.95 in late afternoon deals, the home unit managed to pull back swiftly as state-run banks, likely on behalf of the central bank and exporters stepped up greenback sales.

It briefly touched session's high of 64.72 before settling he day at 64.76, showing a small gain of 3 paise, or 0.05 per cent.

The RBI, meanwhile, fixed the reference rate for the dollar at 64.8161 and for the euro at 79.9442.

In the meantime, foreign direct investment (FDI) in the country grew by a meagre 0.27 per cent to USD 35.94 billion during the first 9 months of the current fiscal, according to the DIPP data.

The FDI inflows were USD 35.84 billion during the April-December period of the last fiscal, 2016-17.

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