Rupee closes shy of 80/$ as RBI shields currency, exporters sell dollars

The rupee settled at 79.99 per dollar on Wednesday - a fresh closing low for the Indian unit versus the greenback

Indian Rupee
Photo: Brent Lewin/Bloomberg
Bhaskar Dutta Mumbai
2 min read Last Updated : Jul 20 2022 | 11:31 PM IST
The rupee settled just below 80 per US dollar on Wednesday as market interventions by the Reserve Bank of India (RBI) and dollar sales by banks on behalf of exporters reined in depreciation in the domestic currency, said dealers. The rupee settled at 79.99 per dollar on Wednesday — a fresh closing low for the Indian unit versus the greenback.

On Tuesday, the rupee had breached the 80-per-dollar-mark for the first time, weakening to a low of 80.06 to a dollar, before recovering ground to settle at 79.95 per dollar.

The rupee has given up 7.1 per cent versus the dollar so far in 2022 amid record outflows of overseas investment and a rising current account deficit (CAD) for India.

Foreign portfolio investors have made a beeline for the exit, selling $29 billion of Indian equities so far in the year due to a blend of high domestic inflation, upward pressure on CAD, and higher interest rates in the US.


With the central bank’s hand seen preventing the rupee from weakening past the 80-per-dollar-mark on Wednesday, the domestic currency was confined to a narrow range versus the dollar, moving in a band of just 7 paise.

“The RBI was there at 79.98-79.99 per dollar, as were exporters,” said a dealer with a public sector bank, adding, “With the RBI showing signs of protecting the 80-per-dollar-level, exporters are locking in dollar sales in the hope that the rupee may not depreciate further from the current levels.”

The RBI aggressively sold dollars from its foreign exchange reserves to shield the rupee from excessive volatility ever since Russia invaded Ukraine on February 24. The RBI’s headline reserves have dropped around $51 billion since February 25.

A decline in the US dollar index, a fall in crude oil prices, and strength in domestic equities also lent heft to the rupee on Wednesday.

“Although the trend is bullish (for the dollar), near-term profit booking cannot be ruled out amid broad-based weakness in the greenback. Technically, spot USD/INR is having resistance at 80.3 and support at 79.7,” wrote HDFC Securities, in a note.

One subscription. Two world-class reads.

Already subscribed? Log in

Subscribe to read the full story →
Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

Topics :Reserve Bank of IndiaRupeeIndian rupeeRupee vs dollarDollarCurrencyUS DollarCADHDFC SecuritiesDollar rise

Next Story