The rupee once again witnessed a decline on Tuesday.
While the news of peace talks between Iran and Trump has made the global sentiments a bit positive and once again a rise has been seen in the stock market. On the other hand, a decline has been seen once again in the currency market. The biggest reason for which is the strength of the dollar. Also there is relaxation given by RBI. Once again the rupee has crossed the level of 93 against the dollar. There are speculations about its further decline. However, the rupee is still trading with a strength of Rs 2 from its life time lower level. In the month of March, the rupee had crossed the level of Rs 95 against the dollar. Let us also tell you what kind of figures are being seen in the currency market.
Rupee falls again
The rupee fell 16 paise to 93.32 against the US dollar in early trade on Tuesday as the American currency remained strong and the Reserve Bank eased restrictions on speculation on the Indian currency. Forex traders said the rise in domestic stock markets and inflow of foreign funds supported the local currency, although uncertainties over the West Asia peace accord kept investors worried. At the interbank forex market, the rupee opened at 93.25 and was trading at 93.32 against the US dollar in early deals after falling as low as 93.37, showing a decline of 16 paise from its previous close. On Monday, the rupee had closed at 93.16, down 25 paise against the US dollar. Due to this, the currency had increased by 47 paise in the last two sessions.
RBI changed the rules
The Reserve Bank on Monday partially withdrew the instructions issued on April 1 to curb excessive speculation in the rupee. The banking regulator had set a limit of net open positions in non-deliverable forward markets at $100 million, and directed banks to comply with it by April 10. Under the revised instructions, authorized dealers or banks can now resume offering rupee-linked non-deliverable derivative contracts to resident or non-resident users, but they will have to comply with certain restrictions on related-party transactions.
Dollar index and stock market strong
Meanwhile, the dollar index, which measures the US dollar’s strength against a basket of six currencies, rose 0.04 per cent to 97.94. Global oil benchmark Brent crude was trading at $ 94.99 per barrel with a decline of 0.51 percent in futures trade. Analysts said crude oil prices remained volatile on continued concerns that oil supplies from the Persian Gulf could be disrupted if Iran continues to block tankers from passing through the Strait of Hormuz.
Additionally, the ceasefire agreement between the United States and Iran is set to expire on Wednesday. In domestic equity markets, the 30-share Sensex was trading 379.33 points or 0.48 per cent higher at 78,899.63 in early trade, while the Nifty rose 103.70 points or 0.43 per cent to 24,468.55. According to NSDL data, foreign institutional investors bought shares worth about Rs 2,066 crore on Monday.
