NEW DELHI: The rupee opened on a weak note versus the US dollar as the greenback strengthened globally on anticipation of the Federal Reserve likely raising interest rates later this week, dealers said.
The partially convertible rupee opened at 76.5230 per US dollar as against 76.4250 per US dollar at previous close. The Indian currency moved in a band of 76.4120-76.5990/$1 so far in the day.
The US dollar index, which measures the currency against a basket of six major rivals, was last at 103.44 versus 103.28 at previous close.
With the Fed seen acting aggressively to rein in high inflation in the US, the dollar index has surged 5 per cent since the end of March.
Higher interest rates in the US typically lead to global capital exiting emerging markets such as India and flowing to the world’s largest economy.
The US Federal Open Market Committee’s two policy meeting ends on May 4.
Indian equity markets have been bearing the brunt of heavy selling pressure from foreign institutional investors over the last few months, with these players having net sold Rs 1.3 lakh crore worth of stocks so far in 2022. FII debt holdings have reduced by Rs 7,950 crore over the same period.
The Indian currency, however, has been supported by considerable foreign exchange market interventions by the RBI in the form of dollar sales.
Anticipation of flows hitting the domestic market on account of companies looking to invest in the IPO of Life Insurance Corporation of India also kept the rupee cushioned.
CR Forex Advisors MD and CEO Amit Pabari said the forex reserves data showed RBI sold $3bn last week bringing down the reserves up to $600 bn. "In a month, forex reserves have declined by $17bn showing active RBI intervention in protecting the currency.”
Source Name:-Economic Times