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Rupee Ends Higher Amid Dollar Weakness, Inflows Offset Importer Demand

The Rupee ended at 81.93 against the Dollar, compared to its close of 81.99 on Wednesday.

India Business
| Written By
Akshit Tyagi

The Rupee ended at 81.93 against the Dollar | Image Credit: Pixabay

Rupee ended slightly higher on Thursday after remaining rangebound through the day, as broad weakness in the greenback and corporate Dollar inflows helped offset demand from importers.

The Rupee ended at 81.93 against the Dollar, compared to its close of 81.99 on Wednesday.

Foreign inflows

There are consistent Dollar inflows into equities and there is also demand from importers, including those purchasing oil, said Anil Bhansali, head of treasury at Finrex Treasury Advisors.

Possible intervention by the Reserve Bank of India was also limiting the Rupee's appreciation as the central bank has bought Dollars whenever the Rupee moved above the 81.90 zone, traders said.

On Wednesday the US Federal Reserve raised interest rates by an expected 25 basis points, which many market participants see as the last despite chair Jerome Powell leaving the door open to another hike in September.

The Dollar index was down 0.5 per cent on Thursday.

"We see the broad USD index falling further into the end of the year. But the pace may be quite uneven until more conditions for a soft US Dollar are met," HSBC analysts said.

"The lower-yielding currencies in Asia had suffered at the hands of a hawkish Fed. But this does not necessarily mean they would rebound more now that the Fed is done. The absolute yield differential is still large for most of them," HSBC added.

Market participants now await the European Central Bank's rate decision, due later in the day.

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