Rupee strengthens further; stocks steady ahead of October inflation data

NEW DELHI: The rupee continues to strengthen against the global benchmark dollar as the US dollar index has weakened substantially last week. The weakening of the dollar is a positive for other currencies.

The rupee opened at 80.52 against the US dollar on Monday versus the previous close of 81.80 on Friday. For the record, barring the latest appreciation in November, the Indian rupee had been weakening over the past several weeks to hit fresh new all-time lows.

In October, the rupee breached the 83 mark for the first time in its history. So far this year, the rupee has depreciated around 8-9 per cent.

“It (rupee) may remain weak-to-volatile for a while, but we think the worst is largely over for the currency,” Seshadri Sen, head of research at asset management company Alchemy Capital Management told ANI.

Sen said the Indian currency rupee had weathered the storm in the face of heavy selling by foreign institutional investors, monetary policy tightening by the US Fed, and the ongoing war in Ukraine which led to high international oil prices.

Meanwhile, benchmark stock indices Sensex and Nifty traded largely steady at 61,762.64 points and 18,362.75 points on Monday morning, respectively.

Investors will be now focused on India’s retail inflation data for October, scheduled to be released later today. India’s retail inflation surged to 7.41 per cent in September, remaining above the mandated range of 2-6 per cent for the third consecutive quarter.

Under the flexible inflation targeting framework introduced in 2016, the RBI is deemed to have failed in managing price rises if the CPI-based inflation is outside the 2-6 per cent range for three quarters in a row.

Against this backdrop, an out-of-turn meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India was held on November 3 to discuss and draft the report to be sent to the central government for having failed in maintaining the inflation mandate. (ANI)