Select Page

The Indian rupee closed slightly higher on Tuesday, supported by foreign banks’ dollar sales and softness in the greenback, which is hovering close to 3-month lows.

The rupee ended at 83.3325 against the U.S. dollar, compared with its previous close at 83.3675.

Asian currencies also rose, led by the Korean won and Indonesian rupiah which were up nearly 0.8% and 0.4%, respectively.

While equity-related inflows and a weaker dollar are marginally supportive for the rupee, the currency continues to lack any directional momentum, said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.

Equity inflows worth $1.5 billion are expected this week following MSCI’s decision to increase India’s weight in its Emerging Market index effective from Nov. 30, according to Nuvama Alternative & Quantitative Research.

Dollar sales by foreign banks, likely on behalf of custodial clients, also provided some support to the rupee on Tuesday, a foreign exchange trader at a private bank said.

The dollar index was last quoted steady at 103.18, hovering close its weakest level since late August 2023.

The 10-year U.S. Treasury yield was little changed in Asia after falling to a low of 4.38% overnight following a larger-than-expected drop in monthly home sales.

“We remain of the view that it is too early to chase the dollar bear trend. There is still some resilience in U.S. data into year-end that can prop up the high-yielding dollar,” ING Bank stated in a note.

Investors now await U.S. personal consumption expenditure (PCE) inflation data for October due on Thursday. Core PCE inflation is expected to moderate to 0.2% month-on-month, down from 0.3% in September, according to a Reuters poll.

  • Published On Nov 29, 2023 at 07:48 AM IST

Join the community of 2M+ industry professionals

Subscribe to our newsletter to get latest insights & analysis.

Download ETBFSI App

  • Get Realtime updates
  • Save your favourite articles

icon g play

icon app store

Scan to download App
bfsi barcode

Share it on social networks