- USD/INR bounces off of support $74.27
- Quiet trading to keep Rupee mixed
- Delta variant spread to jeopardize economic recovery
- Fed’s interest rate decision eyed
- IMF slashed India GDP to 9.5% down from 12.5%
Indian Rupee depreciated on Tuesday erasing Monday’s gains. At the foreign exchange market, the value of the Rupee depreciated by 22 paise settling down 0.23% at 74.49 against the US dollar. However, the USD/INR exchange rate was seen trading on Wednesday lower within a trading range of 74.51 and 74.32.
Covid worries and the upcoming Fed’s interest rate decision will continue to weigh on the market sentiment. According to the data from the health ministry, India reported around 31,000 Covid cases in the last 24 hours dropping from a high of around 42,000 cases as it was early last week.
Meanwhile, market participants will eye the FOMC rate decision and look for possible clues on tapering timing. The US Fed is expected to provide a roadmap about slowing down its bond-buying program.
The International Monetary Fund (IMF) on Tuesday slashed India’s GDP to 9.5% down from 12.5% for the fiscal year 2022 pointing to the impact of the COVID second wave.
The dollar index, which gauges the greenback’s strength against a basket of major currencies, settled down -0.30% at 92.47 on Tuesday.
Elsewhere, according to the National Stock Exchange of India, domestic institutional investors (DIIs) were net buyers in the local equity market worth Rs 729.96 crore. At the same time, foreign institutional investors (FIIs) were net sellers in the local equity market worth Rs 1,459.08 crore.
The domestic benchmark equity index NIFTY 50 settled lower -0.49% at 15,746.45 on Tuesday. Early morning trade saw NIFTY 50 reaching another low of 15,513.45 before buyers stepped in.
The Indian 10-year government bond yield was seen settling at 6.182%.
Currently, one US dollar buys 74.38 rupees, down -0.15% as of 11:15 PM UTC.