Indian rupee Update: On February 13, the rupee opened 8 paise lower. Asian currencies weakened yesterday due to the strengthening of the US dollar. Due to no new trigger in the domestic market, traders are running away from the rupee. The rupee was trading at 90.67 against the dollar after closing at 90.59 in the previous session. Traders said that the rupee rose by more than 20 paise in early trade on February 12.
The Reserve Bank of India (RBI) may have intervened in the non-deliverable forward (NDF) market to support the rupee. However, it soon fell to 90.60 after importers started buying the dollar to hedge their positions.
“For now, unless RBI protects that level for short-term exports and waits to hedge imports around 90.45, we can sell the dollar around 90.70,” Finrex Treasury Advisors said.
Traders will now track US January inflation data for signs of a rate cut from the Federal Reserve. US headline and core inflation is expected to decline to 2.5%, which will give the Fed another opportunity to reduce rates. Low CPI data could push the dollar back and support emerging market currencies like the rupee.
India’s CPI increased to 2.75% in January after adopting the new series with 2024 base year. Under the old 2012 base year, it was 1.33% in December. This is the first time since August that retail inflation has returned to the RBI fixed band of 2% and 6%.
In the equity market, Sensex was trading 841.70 points or 1.01 per cent lower at 82,833.22 and Nifty was trading 271.25 points or 1.05 per cent lower at 25,535.95 around 10:20 am. About 855 stocks advanced, 2,538 declined, and 143 were unchanged.
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