Now Reading: Rupee gains 2 paise in early trade, logs weekly decline
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Rupee gains 2 paise in early trade, logs weekly decline
The rupee opened 2 paise higher at 95.43 against the US dollar on Friday, helped by a weaker dollar index that slipped to 99.7. But the currency closed the week 0.2% lower…
The Story in Brief
The rupee opened 2 paise higher at 95.43 against the US dollar on Friday, helped by a weaker dollar index that slipped to 99.7. But the currency closed the week 0.2% lower at 95.4250, its third straight weekly decline, as persistent dollar demand from importers and rising crude prices offset the gains. The RBI, through State-run banks, sold dollars frequently to curb volatility, keeping the currency in a sub-30-paise range.
Brent crude rose to $87.21 a barrel after the US threatened a naval blockade of Iran. Foreign institutional investors sold Rs 510.69 crore in equities on Thursday. India's July wholesale inflation eased to 9.78% year-on-year from June, while retail inflation at 4.45% remained above the RBI's 4% target. Barclays expects the MPC to hold rates through 2026, with 50 basis points of hikes possible in early 2027.
The Indian Opinion
The usual hand-wringing over rupee weakness misses the point: the RBI has kept the currency in a tight 30-paise band despite West Asia tensions and FII outflows. Weekly loss of 0.2% is hardly a crisis. The real story is that wholesale inflation at 9.78% is not yet spooking the MPC, which Barclays expects to stay on pause through 2026. The test will come when the RBI finally lets the rupee find its own level, watch the next trade policy statement for clues.
Sources (2): deccanherald.com, thehindubusinessline.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
